Nifty may strike all time high, consolidate in later half

Even as volatility prevented the 30-share BSE Sensex from swiftly reaching all time high, the broader index S&P CNX Nifty wriggled past its previous high of 4,269.35 points struck on Monday, 21 May 2007, to reach a fresh all-time high of 4,281.60, 22 May 2007, on strong buying demand for frontline pivotals. It is expected to extend its rally and hit all time high.

However during the later half, the market is likely to consolidate after a sharp recent rally. The Nifty has rallied close to around 18% from a recent low of 3,633.60 on 2 April 2006 to settle at an all-time high of 4,278.10 on 22 May 2007.

However, selective buying and stock specefic action cannot be ruled out completely.

The all-time high level for the benchmark Sensex is 270 points away from 14,723.88 hit on 9 February 2007.

The Nikkei average gained 0.41% on Wednesday as shares of Japan's three largest banks extended gains on expected higher profits this year. Japan's banking sector has lost some 24% since hitting a seven-year high in April last year, due to concern about a legal crackdown at their affiliated consumer credit companies. The Nikkei advanced 71.69 points at 17,751.74 by the close of morning trade. The broader TOPIX index was up 0.78% at 1,745.01.

Wall Street ended an erratic session little changed yesterday as investors upbeat about the latest round of takeover activity remained hesitant to take the market higher ahead of new economic data. While stocks moved sideways, Treasury yields rose to a three-month high.

The Dow Jones industrial Average (DJIA) fell 2.93 points, or 0.02%, to 13,539.95.

Broader stock indexes were mixed. The Standard & Poor's 500 slipped 0.98 points, or 0.06%, to 1,524.12. The index, considered by market professionals as the best indicator of stock performance, passed its record close of 1,527.46 on Monday and again on Tuesday for the first time since 2000. However, the S&P remains well below its trading high of 1,552.87, reached in March 2000.

The Nasdaq Composite index, which has lagged the other major indexes in recovering from Wall Street's prolonged slump early in the decade, rose 9.23 points, or 0.36%, to 2,588.02.

FIIs have been on a buying spree as they purchased $747 million in equities in last 4 sessions from 17 May to 22 May 2007. They bought shares worth a net $113.3 million on 21 May 2007.

Domestic institutions also provided support to the markets as they pumped Rs 1,145 crore in Indian equity market in last 4 sessions from 17 May to 22 May 2007. They bought shares worth Rs 314.4 crore on 21 May.

Crude oil prices dropped below $65 a barrel as investors sold contracts before their expiration yesterday, and before the US government's weekly inventory report. The June contract for light, sweet crude, which expired yesterday, lost $1.30 to settle at $64.97 a barrel on the New York Mercantile Exchange. The July contract also fell $1.36 cents to close at $65.51 a barrel.

July Brent crude slipped 97 cents to $69.52 a barrel on the ICE Futures exchange