Sharp gains are reason for cheer and there are more positives ahead

The markets had a great week and have overcome stiff technical resistance in the course of last week Markets in three days have registered sharp gains across sectors to reach their highest levels in 2016 The BSE SENSEX gained a whopping 135170 points or 534 per cent to close at 2665360 points NIFTY gained 40695 points or 525 per cent to close at 815665 points The broader markets saw the BSE100 BSE200 and BSE500 gain 504 per cent 466 per cent and 434 per cent while BSEMIDCAP and BSESMALLCAP were up 294 per cent and 134 per cent respectivelyAntiDonald Trump protesters are threatened with pepper spray by a Trump supporter outside Republican presidential candidate Donald Trumprsquos election rally event in San Diego California on May 27 2016 Thousands of pro and antiDonald Trump demonstrators faced off outside a rally for the presumptive Republican presidential nominee in San Diego Pic AFPThe top sectoral gainer was BSE CAPGOOD up 1119 per cent followed by BSE BANKEX 646 per cent and BSE FMCG 550 per cent So strong and across the board was the rally that there were no sectoral losers The sector to gain the least was BSE CONDUR up 072 per cent In individual stocks Larsen and Toubro was the top gainer up 1725 per cent followed by State Bank of India 1406 per cent Other stocks to gain were ICICI Bank 1043 per cent ITC up 894 per cent and SAIL 770 per cent The losers were hardly there but Cipla lost 662 per cent followed by Lupin 159 per centThe oil marketing stocks produced excellent results and HPCL gained 1203 per cent followed by BPCL 977 per cent Indian Oil had comparatively speaking poorer results and gained a mere 122 per cent It has been a long time since one saw PSU companies reporting an EPS of Rs 140 plus as was done by HPCLMay series futures expired on a positive note at 806965 points a gain of 22240 points or 283 per cent over the April series close This time the bulls had a surprise element in the monsoon forecast being upped to 109 per cent of the average just before the expiry This enabled the markets to break out of the resistance zone and trap short sellers on the last day Friday being the first day of a new settlement saw the market take a fancy to some of the results particularly SBI and markets rallied strongly for the third consecutive dayEye on USDow Jones had a positive week and gained 37228 points or 213 per cent The primaries for the US election are almost done and we are coming to the end of the same It appears that the contest would be between Donald Trump and Hilary Clinton The big difference in the primaries is that we are seeing a lot of violence in the elections Such things do not augur well for any nation and irrespective of who wins there would have to be lot of patching up to do once the elections are overThe Indian rupee gained 41 paisa or 061 per cent to close at Rs 6703 The rupee has been quite volatile and moving in both directionsResults season is coming to an end and we have a host of companies declaring results today and Tuesday There are a few green shoots visible but above all it is the expectation of a better than normal monsoon is driving the marketThe second is the political equation where it now appears that GST may become a reality These two factors have rallied the market significantly and brought it out of a congestion zone Going forward the resistance of 7980 on the NIFTY would now act as a strong support on any declinesLull before stormThe primary market is currently quiet and this could be the lull before the storm There is a big pipeline of issues waiting to tap the markets What could be the trigger for them is probably the monsoon hitting the coast of Kerala We all know that once the issues start they come one following the other and this time should be no different One only hopes that promoters and merchant bankers price the issue reasonably as there is appetite for fresh paperThere is renewed vigour in the markets it seems as some fresh money has been infused The drivers are the monsoon and things look good so far Expect some consolidation this week after a spectacular run last week It may also happen that the markets may remain where they are but different stocks move in this week compared to those that moved last week Take some money off the table if you are a short term trader and have made money last week