Market opens at record high levels

Market opens at record high levels on Monday morning. On Friday, the Sensex ended the week at 22,339, up 2.6 per cent. The Nifty closed at 6,695, up 3.1 per cent from the previous week.

The 30-share BSE Sensex was up 123 points in opening deals at 22,463 levels while the 50-unit Nifty was up 32 points at 6726 levels.

Japanese shares climbed 1 percent to a 2-1/2-week high on Monday morning on growing hopes China would offer stimulus measures to bolster its sagging economy, with exporters leading the way on a softer yen.

The benchmark Nikkei advanced to 14,839.54 at the opening, its highest level since March 13, and was last traded at 14,808.35, 0.8 percent higher on the day.

On Tuesday, the central bank is expected to meet to decide the direction of interest rates, an event watched keenly by markets for its outlook on growth and inflationary trends. With core inflation having moderated significantly, participants expect it to neither raise nor lower the rates; this has been already factored in by the markets. Any change in this would result in a sharp move, say experts.

For the week ahead, analysts said the Nifty was unlikely to fall below the 6,500-levels. “There has been a shift from 6,400 to 6,500-6,600 puts. This suggests confidence in the market direction. The Nifty is likely to stay above 6,500 and not go down to 6,400-levels in the near future,” said Ashish Chaturmohta, head (technical and derivatives analysis), Fortune Equity Brokers.

The 6,580-level would be a key support for the Nifty, say analysts. A fall below this should present buying opportunities. On the upside, the Nifty is expected to inch closer to the 6,800-levels.

The recent rally in the market has come on the back of continued foreign institutional investor (FII) flows. FIIs were net buyers of equities last week, at Rs 7,562 crore. So far this year, they have pumped in Rs 23,284 crore as net buyers.

The rupee currency has also appreciated, aiding capital flows to find its way into India. So far this year, the rupee has appreciated 3.1 per cent. It is now 59.89 to the dollar.