What is your view on the stock markets for 24-December? Do you see the 3-day rally in Nifty and Sensex continuing?

Some call it the Santa Claus rally for want of a better name, but the fact is that the Nifty and the Sensex are up for 3 days in succession. On Thursday, the Nifty rallied 117 points and Sensex surged 384 points. In the last 3 trading session, the Sensex has gained 1,500 points and looks a lot healthier than it looked on the previous Friday.

In terms of market data fundamentals, the advance decline ratio continued to be favourable at 35:15. At the same time there were indications of a buy on dips market with the India VIX dipping lower to 15.83 levels on Thursday. The day belonged largely to PSUs with stocks like Powergrid, IOC and ONGC leading the rally for the day.

FPIs sold Rs.272 crore in equities while domestic funds and LIC bought Rs.1,197 crore worth of stocks on Thursday. FPIs are expected to be quiet in the last week. In global markets, the Dow surged 197 points and NASDAQ gained 132 points. SGX Nifty was trading with early gains of 35 basis points, taking positive cues from the US and Europe.

The rally may face some pressure on Friday being the last day of the week. However, the undertone appears to have changed ahead of the year end. The good news is that the concerns over the taper and the rate hikes appear to have been largely factored into the market calculations.