Pre-Budget cheer may persist

The most important thing about recovery is to pass the message on. - Maurice Gibb.

A steep drop in food inflation helped the Indian market stretch the ongoing recovery to five straight trading sessions. The Nifty surpassed 5500 and closed well above it. A move past 5500 has triggered hopes of a move towards 5690. It remains to be seen if the Nifty is able to keep its head above 5500.



Volumes and turnover improved on Thursday, which is a welcome sign. But, FII flows remain erratic and are yet to signal a decisive turnaround. The start today is likely to be a good one on the back of a healthy trend across global markets. Things may turn a little choppy later in the day as market participants would be cautious ahead of next week’s Budget session.

Railway Budget is scheduled for Feb. 24 while the Union Budget will be presented on Feb. 28. GDP data for Q3 will also be released on the same day. The market will also have to contend with the F&O expiry next week.

There may be some resistance at higher levels after a strong pull-back, but the good thing is that sentiment has improved. The broad range for the Nifty is expected between 5300 and 5700.

FIIs were net buyers of just Rs 379.9mn in the cash segment on Thursday, according to the provisional NSE data. The domestic institutional institutions were net buyers at Rs 2.4bn. FIIs were net buyers of Rs 13.97bn in the F&O segment.

Allied Digital has been rising lately. Its Board will today consider a Buy Back plan. Nestle India will announce its latest quarterly results and will also mull a dividend. Advanta India's Board will consider fund raising options.