The week ahead: Markets are expected to stay positive.

The Indian markets were upbeat last week with the sensex and nifty rebounding to 26,851 and 8,015 levels , very much in line with our expectations. A slew of positive news such as diesel de-regulation , gas price hike , e-auction of cancelled coal blocks , victory of BJP in assembly elections and  positive global cues gifted a perfect Diwali for investors.

Going ahead , the results season isn’t over. Large corporates like ACC, Bharti Airtel,ICICI Bank, Maruthi  and IDFC are expected to come up with quarterly numbers this week. The derivatives settlement is also scheduled for this Thursday. These two categories of events will decide the market movement for the short term. The sentiments are likely to be positive as the market participants will also start discounting the expected rate cuts from RBI on account of low inflation data. The commodity prices are at 4 year lows and the crude oil prices have hit 3 year low rates, reforms are coming up fast and the domestic economy is rebounding – hopes are high and this should translate into more positive movement in stocks.

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Earnings and global cues key for the markets.

The markets closed at 26,109 ( Sensex ) and 7,780 ( Nifty ) last week. The indices also hit intra-week low before bouncing back on Friday. The volatility was high and investors seem to have confusions about the future direction of the markets. This was reflected in the CBOE volatility index which hit a high of 31 during the week. The fear factor should ease as the election results favored the BJP.

Going ahead, Monday morning should see the markets come back on a cheerful mood. Heavyweights like HDFC bank, HDFC , Cairn India and PNB are expected to come up with quarterly results. So far falling crude oil prices are also favoring the Indian economy as it will help the government to improve the current account deficit. Movement in crude oil prices this week will also have an impact on the markets.

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The week ahead:Q2 to drive the markets.

The Indian markets ended in losses for the third successive week on account of reports of low growth in China and Europe. FIIs who withdrew money from Indian markets to the tune of almost $500 million has further set a bearish sentiment all-round. However, there is no threat to the long term robust outlook for Indian stocks. The benchmarks Sensex and the Nifty ended the week at 26,297 and 7,860 – approximately 1% lower than the previous close. Both the indices are now below their 21 day moving average.

Going ahead, with the corporates ready to disclose Q2 results, market movement would depend on how well they have performed. Experts say that the Q2 numbers will not be a block buster except for a few surprises. In such a scenario, the massive run up in stock prices witnessed in the past few months may see mild corrections in the days to come.

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The week ahead: Q2 numbers to decide the trend.

As the RBI maintained status quo on interest rates, the holiday shortened Indian markets seemed to be very quiet last week. Most of the investors, especially FIIs were on sidelines and the markets moved range bound and closed marginally lower at 26,567 (sensex – 0.22% down) and 7,945 (Nifty – 0.29% down). But that was only one side of the story. We have also witnessed several mid cap and Small cap stocks registering life time highs.

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