Expect A Flat Opening After A Long Weekend

Indian equity markets remained highly volatile in the preceding week. While the profit booking took the leading indices southward in the first two trading sessions, some amount of value buying helped the indices recover in last trading session of the week. Preceding week was a shorter one with Monday and Friday being national holidays. However, though the week was short on the trading front there were quite a few big results were announced in the week. Starting from Infosys which usually sets the tone for results season to other companies like TCS, Wipro and the biggest one Reliance Industries. The results have been till date in-line with the street expectations.

Now, as we are moving ahead in the next week there are many factors that would guide the markets. First and the foremost is the expiry for the April F & O series. As Thursday is a holiday on account of voting happening in Mumbai. Hence the expiry would happen on Wednesday.

Apart from that there are few big results lined up in the next week. The big names include HDFC Bank, Cairn India, Maruti Suzuki India, ICICI Bank, ACC and Ambuja Cements. One important factor is impact of Reliance results would also be seen today only.

On the markets we feel, while this current market rally is largely on account of brightening prospects of the BJP-led NDA coming to power at the Centre, India's macro outlook is also improving, thus pointing to an extended stability for the Indian markets.

We have been constantly saying that macro factors on the CAD Front, inflation and even the IIP front has been improving since last two months.

In addition going ahead the other factors would also impact the markets. We are of the opinion that FII investment trend, global cues and movement of rupee against the dollar will continue to influence the markets. In addition the economic calendar in the coming week will see some important data related to the US economy. These related to home sales and core durable goods order would be presented. As for the US markets, the DJIA in the preceding remained in the positive zone to close at 16408 and S&P closed at 1865 making another high. It was the good corporate earnings data which helped the indices sustain the higher levels. Global stocks advanced last week as U.S. shares rebounded from a sell-off of technology stocks and Federal Reserve Chairperson Janet Yellen reiterated the bank’s commitment to supporting recovery. Ukraine warned that Russia may use a deadly clash at a roadblock in the country’s east as a pretext for invasion.

As for the Asian markets, most of the indices are trading in green. We feel the strong positive cues from the European and US markets is the primary reason behind the same. While the Nikkei is up 0.70 % or 99 points, the Hang Seng is also up by 0.28%. However the Shanghai Composite is down by 0.35%. Japan’s yen slipped as the country posted a wider-than-estimated trade deficit, while the Nikkei stocks rose.

As for the expectations for the Indian indices opening, the SGX Nifty is trading in positive with gains of 7.50 points. Hence taking a cue from these factors, we expect a flat opening for the Indian indices.