Markets to remain volatile with positive bias – Rajesh Agarwal Jindal

rajeshagarwalThe Indian bourses are expected to open the week in the green extending last week’s gains. The truncated week will see some amount of volatility due to F&O settlement. Towards the close of the week,the markets will take cues from the GDP growth figures that would be announced. The street expects GDP growth for Q1 FY15 to be in the vicinity of 5%. Any set back on the GDP front will adversely impact the markets. The markets will also be impacted to an extent by global macro-economic developments.Overall, we expect markets to remain volatile with positive bias.

Coming to sectors the Oil & Gas sector is likely to remain in focus after the linking of revenue calculation to production. We expect to see some action in the Metals & Mining stocks especially in Iron and Steel segment following announcement of hike in royalty rates for iron ore mining to 15% from the previous 10% and weak Chinese data. Sugar stocks will also remain in the limelight after hike in import duty to 25% from 15%. The move is likely to make imports dearer and raise demand for domestic sugar manufacturers. Banking stocks are expected to maintain their up move on account of proposed banking reforms. The approved draft cabinet note proposes to create a holding company structure for PSU banks which will raise money in order to recapitalise these banks.

On the global front, the US markets are likely to remain firm on renewed enthusiasm infused by encouraging macro-economic data and the Fed maintaining its dovish stance for the time being. Fed chief Janet Yellen has cautioned against the Fed moving too quickly to raise interest rates, Yellen said there was no “simple recipe” for central bank policymakers in deciding when the labor market had improved enough to handle a rise in interest rates. Economic conditions are improving but the Great Recession was so damaging that it has made assessing the job situation “especially challenging”, she added.

Some amount of caution will prevail among the market participants as Europeans push for new resolution on Gaza. The European markets are expected to trade with a positive bias amidst volatility induced by weak investors’ sentiment on account of disheartening macro-economic scenario. Asian markets are likely to open the week on a positive note after US Federal Reserve Chairman reinforced her dovish stance.

The world markets would also be impacted by a string of economic data that are likely to be announced during the course of the week. Some of these are US Home Sales, US Chain Store Sales, US Durable Goods Order, US House Price Index, US MBA Mortgage Rates & Mortgage Applications, Japan Stock Investment by Foreigners, Japan’s Unemployment Rate, EU Business Confidence & Consumer Confidence, US Jobless Data, Japan’s Inflation and Industrial Production data. 

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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.)