Markets are singing Happy Days are Here Again – Rajesh Agarwal Jindal

rajeshagarwalIndian bourses are expected to trade with a positive bias. The markets will take cues from important macroeconomic data that would be announced during the week such as inflation, forex reserves and industrial production growth. As revealed by last week’s FII robust net investment data the markets are seeing bullish undercurrent and we do not expect to see any substantial correction during the week. Overall, we expect markets to continue their general up-move with intermittent profit booking.

Coming to sectors, Power, Coal and Iron & Steel stocks will continue to be in focus as investors remain jittery on SC ruling about coal block allocation. More clarity on the status of the allocated coal blocks is expected during the week as the hearing on de-allocation is scheduled on 9th Sep 2014.

We expect Banking stocks to remain strong owing to the healthy credit-deposit growth highlighted by recent data release. Both loan and deposit growth remained robust with the latter surpassing the former indicating rise in savings.

Pharma stocks are also likely to remain in focus as crisis continues on account of essential HIV/AIDS drugs shortages owing to delayed payment by the government.

Mining stocks would see some action buoyed by the news that the Union Government will soon introduce amendments to Mines and Minerals Development and Regulation Act (MMDR Act) to enhance mining in country.

The Assocham’s robust outlook on growth of paint industry would keep stocks in this segment firm. The Rs 40,600cr Indian paint industry is likely to see a 20% CAGR until 2016, according to a study by Assocham.

On the global front, the US markets are likely to chart the positive territory on hopes of economic recovery. The ECB’s surprise rate cut is expected to help the European markets start the week on strong footing.  Hopes of improvements on the Ukraine front will also keep the markets strong as Ukraine and pro-Kremlin insurgents appeared to be observing a truce. We expect the Asian markets to remain in the positive zone and be impacted by the interest rate announcement by Bank of Japan.

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 Bank of Japan’s Monetary Policy, US Mortgage Data and Wholesale Inventories, Japan’s GDP Growth and Current Account data, Japan’s Industrial Production, US Chain Store Sales and Retail Sales Data, UK’s Industrial Production and Balance of Trade, EU Industrial Production, US Export and Import Price Indices and US Jobless 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.)