Markets End The Week On A Flat Note

The markets witnessed lacklustre movement during the week. This changed on Friday, though, after the markets witnessed a sell-off after the May series expiry on Thursday, May 30. During the week, both the Sensex and the Nifty remained flat, witnessing gains of a mere 0.28% and 0.04% respectively.

During the quarter, the Agriculture sector has recorded growth of 1.4% against 1.8% in Q3. Mining has seen a decline of 3.1% from -0.7% in Q3. The manufacturing sector has seen some respite, with a growth of 2.6% against 0.1% a year ago and 2.5% in Q3FY13.

On the global front, the US economy grew at an annualised rate of 2.4% in the first three months of the year 2013. This figure is slightly slower than the 2.5% rate originally estimated for the quarter, which can be attribute to higher consumer spending, which was stronger than the expectations. However, economists were of the opinion that the GDP growth may witness some slowdown in the next 3 months.

On the Asian front, the Nikkei fell by more than 5% this week. Japan had seen extraordinary movement starting last fall, thanks to the new PM Shinzo Abe's new aggressive stimulus campaign hailed as "Abenomics",. But lately things have been fairly disastrous. Among the concerns are that of a sharp rise in bond yields.

On the domestic front, the RBI has tightened its rules for restructuring of most types of loans in line with global practices. As per the latest RBI notification, provisioning on the newly restructured account has been raised to 5% from June 1 from 2% as it currently stands. However, this will be done in a phased manner for the old restructured accounts. The RBI also said that existing "regulatory forbearance" would no longer be available from April 1, 2015.

The monetary inflows from FIIs remained strong last week. FIIs bought equities worth a whopping Rs 19678 crore during the week. On a YTD basis, the FIIs have pumped in Rs 80851 crore in the Indian equity markets. DIIs ended the week in the red, selling equities worth Rs 3301 crore.

With the March quarter results season drawing to a close, the markets are now eyeing the RBI meet that is scheduled for the second week of June. Otherwise, the markets are likely to trade in a volatile zone, largely taking cues from the global developments.