Though the benchmark index of the Bombay Stock Exchange, the Sensex, recaptured the 14,000-mark during intra-day trade on Monday for the first time since February 23, 2007, the mood is cautiously optimistic on Dalal Street ahead of the Reserve Bank of India's monetary policy meeting scheduled for Tuesday.
While the Sensex shut shop at 13,928.33 points, up by 0.22 per cent, after hitting an intra-day high of 14,046,52 points, the broader index of the National Stock Exchange, the Nifty closed marginally higher at 4085.10 points.
Market experts remain bullish on the markets. However, they expect a brief period of consolidation in the near term.
"We are bullish on the markets. However, we need to see what the RBI governor has to say tomorrow. Further, since the market has gone one way up in the few trading sessions, a correction of say 300-400 points might happen, which will be healthy for it," says Sachin Neema, head of research of India Infoline.
Amid concerns of a climbing rate of inflation, India's central bank is meeting on Tuesday to review the monetary policy. The RBI had in its last meeting hiked the repo rate by 25 basis points to 7.75 per cent and also announced a hike in cash reserve ratio to 6.5 per cent, which had seen the Sensex crash by more than 500 points.
While being positive on the market, chartists too expect the markets to consolidate, if not undergo a minor correction.
"The next resistance level on the Nifty is around 4178. If that is broken, the markets could test their all-time high. However, there are two important events approaching – the RBI meeting and derivative expiry. The Nifty has good support around 4050," says Vinit Birla, a technical analyst of Pranav Securities.
Though the Sensex ended higher on Monday, most sectoral indices showed weakness except for Tata Steel which topped the gainers pack on the Sensex, surging by 4.35 per cent or Rs 23.25 to close at Rs 557.60. It was followed by Reliance Energy (up 2.33 per cent) and Reliance Communication (up 1.87 per cent).