The Indian market preempted a recovery for global markets yesterday, closing above the 16000 mark. A retracement trade has played out globally after all the pessimism, says Udayan Mukherjee, Managing Editor, CNBC TV18.
The market did a pullback yesterday but there is more in store. The bearish sentiment had overplayed in the last three days, he said. The talk about a European financial stability fund has also improved the investor sentiment, he added.
ver the next few days relentless global selling may ease off. Reuters
The other factors that have helped the market overcome the lows are the pullback in crude prices, the slip in the dollar index and the fact that the S&P has maintained the crucial 1100 mark. The market should see the pull back for a couple of days more, he said. 4700 is an important floor. The market will foray into that region for some time, he added. Nifty will see movements of 400-500 points around the 4700 mark which means traders will have to learn to live with this volatility.
The endless news flow from Europe plays up volatility in the market which leads to extreme mood swings among the investors – from bearishness to unreasonable optimism, he said.
Talking about expiry, which happens this Thursday, Udayan said, there is no wave of panic, or major negative newsflow. That should see the market through a smooth expiry.
There is a possibility of another rally coming before the 4700 level is broken. The market could see a pull back to 5000-5200 . But it is difficult to say 4700 is the final low, he added.
Going forward, over the next few days relentless global selling may ease off. This expiry should therefore happen in the zone of 4900-5000, he said.
Hear him talk more about the markets.
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