Investors need to trade cautiously as clouds are yet to be clear

PFW Bureau / Sep 2

After having a south-bound journey for few weeks, the equity market changed its gear from bearish to bullish mode last week. The domestic market opened in the positive zone on Monday that continued throughout the week. 

However, the market is expected to be volatility in the next week as there has been a mixed news trend. One the one hand, Reserve Bank of India (RBI) has already expressed its concern over the shadow of the subprime mortgage crisis at the domestic market. And, on the other hand, the inflation figures have come down to 3.94% for the week ended on August 18, 2007 which is a positive signal. 

The Bombay Stock Exchange (BSE) Sensex regained 6.2% or 893.73 points to close at 15,318 points last week between August 27 and August 31. The National Stock Exchange (NSE) S&P CNX Nifty jumped 6.54 points or 273.85 points during the corresponding period to end at 4,464 points on Friday.

The data available with Securities and Exchange Board of India (SEBI) for the four trading sessions shows that both Mutual Funds and FIIs were the net buyers in the equity market at Rs.1,177.60 and Rs.710.8 crore respectively.

Last week, BSE sectoral indices gained - Metal (12.55%), Oil & Gas (8.56%), Consumer Durables (7.83%), Bankex (7.43%),  PSU (7.08%), Auto (6.76%), Realty (6.76%),  Capital Goods (6.36%), FMCG (5.11%), Teck (4.4%), Health Care (4.35%) and IT (4.02%) – at the bourses.

Positive waves breezing through the market also helped BSE Midcap and Smallcap to gain by 6.75% and 7.16% respectively.

An overall analysis indicates that bulls have stepped in with a cautious and somewhat determined mood to pick up the threads of all positive cues.

The retail investors need to trade cautiously in the current week in the equity market. As mentioned in the beginning of this report, there are both positive and negative factors expected to influence the stock market in the current week – September 3 to September 7.