A Flat Trading Session With Thin Volumes

If we take a look at the week gone by, despite profit booking the FIIs maintained their dominance. After putting a whopping Rs 20085 Crore in Indian equity markets in the month of March, they have already poured in Rs 4998.70 Crore in the First week of April 2014. This clearly shows how the FIIs have been bullish on India.

Now if we take a look at the factors that are expected to drive the markets in the upcoming week, General Elections tops the chart. The polling process would start this week and keep the markets quite buoyant. Apart from that the second factor would be FII inflows. As mentioned earlier the FIIs have been bullish on India and hence the inflows are likely to sustain.

The third factor is the start of March quarterly results. With some of the macro factors witnessing a good amount of improvement, many on the street are expecting the result to be better than the earlier three quarters of FY14. The earlier three quarters of FY14 were quite dull and below the street estimates in terms of sales and net profit growth.However with inflation fast approaching the target levels of RBI, the corporate results are also likely to be better than the earlier three quarters.

In addition the INR movement in up-coming week would also likely to be a major game changer. The INR has appreciated against the USD and we feel it is likely to keep its momentum alive even going ahead.

While these were the domestic factors, on the global front the scenario is quite different. On Friday (preceding week) the US Markets closed with significant losses. The Dow closed at 16412 (Down 160 points or 0.97%) the S&P also closed in red with a loss of 1.27%.  NASDAQ was a major loser as the index declined by 2.67%. Again it was a sort of profit booking as few of the momentum stocks slumped. The US payroll data was also announced on Friday. It was marginally lower than the street estimates.

Taking a cue from the US markets, the Asian equity markets are also trading in red. While the Nikkei is trading at 14881 (Down 1.23%) the Hang Seng is also down by half a per cent.

The SGX Nifty is trading with marginal gains of just five points today. We expect the Indian Indices to open on a very flat note and remain highly range bound. With tomorrow being a holiday (which is likely to make it a very long week end), the volumes would remain thin today. Hence it would be a very tepid and dull trading session for the Indian equities.