We expect the Indian bourses to open on a positive note following end of military drills by Russia near the Ukrainian border. Moreover,FIIs’ buying on Friday signals that the markets may again be heading for the green zone. Markets may make good some of the losses seen last week on increased value buying by foreign institutions.
The outlook for the second half for monsoon rains has improved after some above-average rainfall that is also expected to spill over into next week. This is likely to boost investors’ sentiment on hopes of easing food inflation. The market sentiment will also receive a boost from the government’s assurance to take all possible steps to protect the domestic industries after concerns were raised over cheaper Chinese goods flooding the market.
Investors would though remain cautious of the developments on the global front. Markets will also take cues from important announcements such as IIP, Inflation and Balance of Trade numbers. Overall, we expect markets to remain fairly volatile during the week but trade with a positive bias.
Coming to sectors we expect to see some action in the sugar stocks with mills in UP deciding to suspend their operations and the Government’s decision to raise sugar export subsidy to Rs.3,371/tonne. Power, Consumer Goods, Metals & Mining and Capital Goods stocks would also be in focus as the week will see announcement of IIP numbers. Auto stocks are also likely to firm up on reports of higher vehicle sales by the industry participants.
We expect the US markets, which bucked the global turmoil, to extend Friday’s gains and start the week on a positive note, buoyed by signs that tensions in Ukraine might be easing.
Sentiments in European markets are expected to turn positive following positive development on the Ukrainian front. The European markets will also be guided by a number of important data announcements which will shed light on the health of the Eurozone economy.
Asian markets too are expected to open the week on a positive note on reports that Russia wants to de-escalate the crisis in eastern Ukraine.
The world markets would also be impacted by a number of economic data that are expected to be announced during the course of the week. Some of the important data announcements during the coming week include the US Jobless Data, US Manufacturing and Industrial Production Data, US Mortgage Rates, US Retail Sales, Bank of Japan’s Monthly Report, Japan’s Consumer Index, Japan’s GDP Growth, Japan’s Foreign EU Economic Sentiment Index, UK Unemployment Rates, EU GDP Growth and Inflation data, Japan Industrial Production and US Monthly Budget and Chain Store Sales.
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(Working as Head-Research at Eastern Financiers Ltd, am a post graduate in commerce from Calcutta University, and have gained wide experience in the last 18 years. Prior to joining Eastern Financiers, I have gained in depth knowledge of the Financial Markets while working with Capital Market Publishers, Lohia Securities & CD Equisearch. As head of the Equity Research Wing, I appear regularly as Guest Analyst at CNBC, Awaaz, CNN-IBN, NDTV Profit , Zee Business,Bloomberg UTV, ET Now & R Plus.)