Market View: MARKETS IN SWINGING MOOD, RESULTS TO SET DIRECTION

All major markets globally gave negative returns of 4-5 percent (except Shanghai which has up by 10 percent), and Indian markets were in no way an exception, however the extent of damage was lower at 2 percent. There was a mixed reaction among Indian indices with few (Bankex, FMCG, IT) witnessing decline of 1-2%, few (auto, metal power) remaining flat and rest witnessing gain of 1% (real estate) as depicted in the table. FIIs were net sellers during the period with outflow of Rs 1,059 crores, as they had also pumped in money to the tune of Rs 27,725 crores. The net sell-off of Rs 2,877 crores has been largely during the end of December mainly on account of profit booking and the reversals started in January, as FIIs pumped in money to the tune of Rs 1618 crores (net).

The slight volatility witnessed in the Indian markets in the recent past has been warranted, as there has been profit booking by investors who made good profits during CY14 market run-up and those who had missed the opportunity earlier tried to enter the markets. Slight correction at different intervals can be considered as positive considering the fact that it will give depth and consolidate the markets. This will further help the markets to remain buoyant and on an uptrend.

The factors which are expected to lead the market direction going forwards are i) Q3 earnings seasons, ii) Joint statement by Indian Prime Minister and US President (during his special visit during Republic day) and iii) further development in ongoing events in global factors. Other factors which will be looked upto from a long term view point will policy action by the RBI, and Railway Budget and Union Budget.