The market completed the seven-week rally last week on good buying interest at every dip. Though the week started with a weak undertone and the market also fell for the first three days on some profit booking, it recovered significantly during the last couple of trading days to test the recent highs again. Global markets also moved almost in the same way.On a week-on-week basis, the BSE Sensex gained 306 points or around 2.8% to close at 11329.05. The S&P CNX Nifty ended at 3480.75, up 97 points or around 2.9%. The previous week also remained an eventful one for the market with the RBI policy meeting, reporting of results by some important companies and second phase of general elections.
The profit booking during the earlier part of the last week is somewhat expected after the continuous rally that the market has observed in the last few weeks. The recovery in the last couple of days, however, is indicating that the upward rally is not over yet. Though the global markets got some support from better-than-expected results from some major US banks, some economic data that came during the last couple of weeks still shows the gloomy side of the major economies. The RBI also indicated some concerns regarding the Indian economy in its report. These things are suggesting that the current upsurge in the market could be a bear market rally only and may not sustain for long. In the currency market also, the rise in Japanese yen against US dollar is indicating that the liquidity situation may see some tightness again. That would be an important factor for the markets to see some downfall. However, looking at the current up move and increase in volume that scenario does not seem likely in the very short-term. Indian markets have already breached some important psychological levels on the higher side and buying interest at every dip suggests that the rally still has some appetite to continue further. Overall, the market should maintain the positive undertone in the coming week too, unless there is some significant weakness in the global market.