Assembly poll results may spur bull run

Buoyed by positive global cues like the perception that the US Federal Reserve was done with the rate hike cycle and a reversal was on the cards, renewed buying from FIIs and robust GDP data; the benchmark indices scaled fresh lifetime highs. NSE Nifty rallied 473 points or 2.4 per cent to 20,268, and BSE Sensex jumped 1,511 points or 2.3 per cent to 67,481. The broader markets outperformed the benchmarks with the Nifty Mid-cap and Small-cap indices gaining three per cent each as the benchmark indices kept up the rally for the fifth week in a row. FIIs have net bought Rs10,593 crore worth of shares in the cash segment in the passing week, and their net buying for November stood at Rs5,795 crore, while DIIs have seen net purchases of Rs4,354 crore during the week, and Rs12,762 crore for November.

Observers expect the bull run to accelerate in coming months on the back of a better-than-expected quarterly GDP growth with consistent expansion in manufacturing activity, lower international crude oil prices, and return of foreign investors as net buyers and Assembly results outcome more or less perceived to be favourable for the ruling dispensation. All eyes will be on the MPC meeting scheduled on December 8. A status quo on the policy rates is likely to be maintained, given the consistent easing in inflation, but the commentary on any supply shocks, growth outlook and any hint about rate cut in the coming year will be watched. On Monday, the market will first react to the results of four States elections namely Madhya Pradesh, Chhattisgarh, Rajasthan and Telangana releasing on December 3.

Quote of the week: The individual investor should act consistently as an investor and not as a speculator — Ben Graham. You are an investor, not someone who can predict the future. Base your decisions on real facts and analysis rather than risky, speculative forecasts.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)