Indian Markets To Open On a Flat Note

After a strong up-move for first four days in the preceding week the Indian markets closed in a negative zone on Friday 26th April 2013. Below expected results from the likes of ICICI Bank and even Hero Moto Corp was the primary reason behind the decline in the markets. Further some amount of profit booking was anyway expected after a brief rally in the past few trading sessions.  Apart from that the March 2013 quarter results have not been encouraging. Though the results season was anyway expected to be a tepid one, most on the street had already factored in those numbers. However the noticeable factor is, the results have been much below even those lower expected figures. 

Going ahead we feel it will be phase of consolidation for the Indian markets. After a brief rally, the leading indices are likely to take a breather for few trading sessions as the next immediate trigger for the markets is expected rate cuts, when the RBI Meets on 3rd of May 2013. Till then the indices are likely to trade sideways.Most on the street are expecting a rate cut of around 25 basis points. However we are of the opinion that, there is hardly any room for the RBI to cut the key interest rate further. Hence we would not be surprised if the rate sensitive sectors like Relaty, Auto and Banking witness some profit booking in coming week.

On the global front, USA as well as European markets closed in red with marginal losses on Friday 26th April 2013. About the Asian markets, Nikkei is trading in marginal negative zone along with Kospi and Hang Seng. But Taiwan and Straits are trading with some gains. So the Asian indices are providing mix cues. Growth in Chinese industrial companies’ profits slowed in March 2013, adding to evidence that the nation’s economic recovery is losing steam. This has been considered as one of the concerns. SGX Nifty is trading at 5895 with some marginal gains of 14 points.

We feel the Indian markets have a flat opening on the cards. We expect a very Range bound trading throughout the session. However with some big results like HUL, ING Vysya Bank and Shree Cements, one can expect stock specific movement.