The Indian equity market bounced back sharply during the last week, after falling significantly in the previous week. On the very first day of the week, the market recovered most of the losses by the closing. This was followed by two consecutive days of strong gains. After taking a breather on Thursday, it again soared on the last trading day.
On a week-on-week basis, the BSE Sensex surged 1241 points or 9.2% to close at 14744.92. The S&P CNX Nifty ended at 4374.95, up by 371 points or 9.2%. Despite recent concerns on a higher fiscal deficit and some disappointment from the Budget, the market quickly recovered due to the renewed optimism on the government’s plan to tackle the deficit and ensure the growth path.
The market came back to its bull run again in the previous week with a quick recovery. Volatility remained high during the past couple of weeks. However, the intensity of the rise raises some doubts about the sustainability of these gains. The long-term outlook though looks strong, but in the short-term, the market has been moving somewhat unpredicted. However, the momentum indicates a different scenario. Q1FY09 result by Reliance Industries would be a major event during the coming week for the market to get some short-term direction. Global cues, on the other hand, have been supportive and some weakness there can trigger a downward correction. Overall, initially the Indian market in the coming week is likely to remain strong. However, some profit booking is likely to happen during the latter part.