Market gained more than a percent in the passing week, driven by big newsflow such as TCS buyback announcement, hopes of Axis Bank merger, likely Vodafone-Idea deal, Bharti Airtel 's Telenor India acquisition, Reliance 's new tariff plans, consistent domestic liquidity support and weakness in dollar due to Federal Reserve's cautious approach on a further rate hike.
The Nifty hit a fresh 52-week high of 8982.15 intraday on the last day of truncated week but failed to hold that level due to profit-booking ahead of the long weekend. The market was shut on Friday for Mahashivratri holiday.
After hitting a new one-year high on Nifty, experts feel this breakout may take the market higher from current levels. They expect it at a new high in the coming days as a lot of positive newsflow is lined up but maintained cautious approach after a 7 percent rally seen in the last five consecutive weeks.
According to them, further consolidation in telecom & banking space, reversal of negative effect of demonetisation on economic activity could help the market surpass its earlier record high.
Some experts believe the upside might continue till results of assembly elections (in five states) come out on March 11, wherein Uttar Pradesh is key for BJP. After a one-sided win in 8 out of 10 municipal corporations of Maharashtra, BJP is in a strong position and hopes are up for the party in Uttar Pradesh which sends to the parliament most number of representatives.
As the highest weekly additions in Nifty March options are seen at 8900 Put and 9100 Call strikes, ICICIdirect believes 8850-8900 would remain an important support zone. The pullback may be extended towards 9050 in the coming week, it feels.