Bridging the gap!

The hardest thing to learn in life is which bridge to cross and which to burn. - David Russell.

Five days of positive action on the bourses has seen the Nifty cross the 200-DMA in intraday trade though it ended just shy of it. The Nifty could finish above the critical technical level today but any upside won’t be without hiccups. Global cues are mixed. The start is likely to be a subdued one on account of the overnight fall in the US market and weakness in the Asian equity benchmarks.



The encouraging part is that FII inflows – a major catalyst for Indian markets – have picked up in the past few days. Yet, beware of volatility ahead of the year-end tax adjustments and F&O expiry. On the whole, the undertone for the Indian market is likely to remain upbeat as long as the Nifty sustains above 5600. The next big obstacle is seen around 5750.

Banks and IT titans could pace the rally from here on. Keep an eye on Reliance too. Telecom shares might be back in the spotlight as the CBI gets ready to file chargesheet in the 2G scam on March 31.

Also, the DoT is reportedly mulling slapping fresh notices on telcos for violating rollout norms. At the same time, the PAC is to summon top India Inc. honchos in connection with the 2G scam. Be very selective and careful while dealing in non-index counters.

For the time being, it looks like the current rally could continue to be driven by the Large-Cap stocks.

European indices finished flat while the euro recovered amid growing talk of a rate hike. Shares in Tokyo have extended their recent slide amid mounting fears over radiation leaks from the embattled Fukushima Daiichi nuclear plant. Stocks in China are also in the red.

In Libya, Allied-backed anti-government forces continue to make further inroads even as the unrest continues in Syria and Yemen.

Crude oil is down for a fourth consecutive day. Copper fell the most in more than two weeks. Gold declined amid improvement in global risk tolerance. Silver, platinum and palladium also fell.

Watch out for data on current account deficit, fiscal deficit, auto sales, trade figures and PMIs later in the week. Globally, investors will keep tabs on economic statistics such as the PMI data and the US jobs report.