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Benchmark indices will track overseas markets next week, and investors will mainly eye impact of talks between US lawmakers on ways to reduce effects of automatic tax hikes and spending cuts that threaten to push the country into recession in the first half of 2013. US President Barack Obama will meet Congress leaders, including House Speaker John Boehner, at the White House yesterday to attempt reaching a deal to prevent the economy from slipping into a recession. The House of Representatives are also scheduled to meet on Sunday to resume deliberations on the same. The solution to the fiscal cliff issue may provide some short-term relief to the markets.
The National Stock Exchange's 50-share Nifty could surpass its resistance of 5960, if US lawmakers are able to hammer out a consensus on the fiscal cliff issue. There are a few market participants who are unsure whether a US budget deal will suffice in helping the Nifty break out of its 5820-5960 range and expect profit booking to sustain at higher levels. They see immediate support for the Nifty near 5800-5820, even in the event of a failure of the US budget talks. Yesterday, the Nifty ended at 5908.35 points, up 38.25 points or 0.65% from Thursday. The BSE's 30-share Sensex ended at 19444.84, up 121.04 points, or 0.6%. Year-end buying by mutual funds to prop up their net asset values may limit the downside in the Nifty. Among stocks, bank stocks may trade with a positive bias next week, in spite of intermittent profit booking, on hopes of a rate cut from the Reserve Bank of India in its third quarter review of monetary policy 2012-13 (Apr-Mar) on Jan 29.
Bank Nifty is seen in the range of 12800-12900 in the near term. The Bank Nifty ended flat from Thursday at 12458.15 yesterday. Auto and cement stocks will take cues from their December sales numbers next week. Suzlon Energy's stocks may remain in the spotlight, as investors await the outcome of a reported meeting between the company and its lenders yesterday to discuss the company's debt-restructuring plan. Stocks of Bharti Infratel are likely to slip further, as they are viewed as expensive. The stock, which debuted on the bourses yesterday and ended well below its issue price of 220 rupees at 191.65 rupees, may further slide towards 175-180 rupees in the near term.
