InvestorQ : What is your stock market view Tuesday 16 February? How to position my trades after such a sharp rally on Monday?
Mahima Roy made post

What is your stock market view Tuesday 16 February? How to position my trades after such a sharp rally on Monday?

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diksha shah answered.
3 weeks ago
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The Nifty closed on Monday at record high levels above the 15,300 mark while the Sensex closed above 52,000 for the first time. Clearly, both the indices are in uncharted territory and is additionally supported by the fact that the A/D ratio of the Nifty 50 at 28:22. More importantly, heavyweight banks are still driving the market.

On Monday I had referred to sectoral laggards catching up across various sectors and that trend was amply evident in banking stocks like Axis Bank, ICICI Bank and even SBI. They were playing catch up with the early rallying stocks like HDFC Bank and Kotak Bank. There seems to be an overall upward revision of financial stocks across the board.

Foreign investors were back to their buying ways on Tuesday although the momentum appears to have normalized a bit. FPIs bought Rs.1234 crore while DFIs sold Rs.1049 crore of equities on Monday. In the first half of the month of February, FPIs infused more than Rs.22,000 crore into Indian equities and this could turn out a lot better than January.

On Monday, the US markets did not function but in Europe FTSE was up 2.5% while the DAX of Germany was up over 1.5% in late trades. The benchmark SGX Nifty, which sets the trend for the Nifty, is marginally in the negative in early trades on Tuesday and that could be routine profit booking. The overall budget euphoria appears to still subsist in the market.

It is hard to take an outright positive stance because the market cap of the BSE has moved up from Rs.100 trillion to Rs.200 trillion in less than 10 months. That is unprecedented and built entirely on liquidity. The bottom line is that unless this liquidity reverses, the rally should continue, or at least I don’t see chances of the bullishness halting.

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