Will the market rally continue?

After spurting by a whopping 236 points last week, the market is waiting for more action in the current week. Will the rally continue? Subst...

After spurting by a whopping 236 points last week, the market is waiting for more action in the current week. Will the rally continue?

Substantial positions in blue chip stocks were carried forward on Thursday, the last day of expiry of January derivatives contracts, reflecting that investors preferred to stay invested rather than pull out funds from the market. Strong December Q3 results also triggered a rebound on the bourses last week.

The Q3 results season is almost over. The next trigger for the market is the US Federal Reserve’s meeting in the first week of February 2005. The Fed is expected to hike interest rates by 25 basis points. This has already been factored into global equity markets.

Another major trigger is the Union Budget 2005-2006 that would be unveiled at end of February 2005. ‘‘The market will remain strong till Budget,’’ said a BSE dealer.

The Sensex jumped 179.66 points on Friday recording its biggest daily gain in months. Sensex rose in three out of the four trading sessions.

The recovery on the bourses materialised even as foreign institutional investors (FIIs) continued to press sales. The cumulative FII outflow for January 2005 reached Rs 373.70 crore (till January 25, 2005). On the other hand, local mutual funds stepped up buying. Inflow of local funds in equities totalled Rs 622.55 crore till January 25.