By S Jha
New Delhi, May 26: Positive cues, when they come in bundles, often send indices trending, and such was a day on Friday when Nifty roared to gain over 170 points to break out of the stiff technical resistance around 18440-50 level. Bank Nifty also shrugged off almost a week of bearishness to come roaring with gains of over 300 points. It was a perfect one-side movement on the bourses when the indices went trending with the passage of the time.
Reserve Bank of India Governor Shaktikant Das gave the ammo to the bulls to run amok on the street by stating that India may be on course to touch a seven per cent GDP growth in the current fiscal.
This was further strengthened with estimates that the manufacturing capacity utilization has gone over 75 per cent, while the private investment is also showing signs of picking up. In addition, the rising GST collections had already shown that the domestic consumption remains strong. Icing on the cake has come from the confidence that the retail inflation may remain 4.7 per cent in May which will give cushion to the RBI to keep the rate hike button on a pause for a longer duration before the Central bank begins cutting the benchmark lending rate from next year.
Besides, US House Speaker Kevin McCarthy has dropped enough hints to suggest that the debt ceiling deal, which will see further enhancement of the limit, possibly getting inked soon. This has already set the Dow Jones on a gaining spree, as the bourse scaled above the 33000 level mark.
Nasdaq on the other hand is in its own territory, gaining on the strength of the tech-companies and also because of the mad rush for chip makers. The Nasdaq recovery brought a rally in the IT index, as among the heavyweights it was HCL Technology, which is said to be attractive on the technical chart, rising strongly in the company of Wipro, HCL Technology and others.
Traders often wonder how one should figure it out if the market will go trending upwards, and the market participants often argue that the cues may come from the heavyweights of the indices, who hold much weight. Reliance Industries is one such index heavyweight, besides the likes of HDFC twins and a few others, who can single handedly give a direction to the market. Reliance Industries gained over two per cent on Friday, and the scrip kept gaining since morning to bring steam in the market to spurt in the latter hours of the session.