The Indian equity markets ended on a flat note last week due to weak domestic economic data and increased chances of US rate hike in September. Investors are on an edge as the speculation regarding when the next interest hike cycle might start in already gripping the markets.
Going ahead, Monday morning is likely to witness a positive start as the markets are expected to cheer the appointment of Urjit Patel as the next RBI governor. Mr Patel spearheaded the recent inflation targeting approach of the RBI. This is positive for the long term prospects of Indian markets and bad news for those who fight for a low interest regime in India.
Last week, the Sensex and the Nifty closed marginally higher at 28,078 and 8,683 respectively thanks to the passage of GST bill and strong global cues towards the weekend. Passage of GST bill doesn’t mean that everything about it is over. There are still many steps to be completed before it becomes a reality. Every state has to approve the GST and this may keep markets on the edge in the coming months.
Going ahead, the RBI meeting is on Tuesday and experts are of the opinion that key rates will remain unchanged. Both the indices have managed to technically break the resistances at 28,000 and 8,600 but the break is not strong enough to confirm that the momentum is on. However, the markets are likely to start off the week on a high. The Nifty futures trading on Singapore Exchange were up 56.50 points or 0.65 per cent at 8,759 which indicates a high start for sense and Nifty here.
Last week, the Indian stock markets put up a good show as the Sensex and Nifty ended higher at 28,052 and 8,639 respectively. The mid-caps continued to beat the frontline indices. However, volatility was seen ahead of July derivatives expiry and this kept a check on the rising Indices to some extent. The indices were still not able to break the key resistance zone conclusively.
Moving ahead, the markets are likely to have wobbly start on Monday morning as the fate of GST bill will be decided early this week. July auto sales data, on-going results season and progress of monsoon are the other key data points that may play a part in stock price movement this week. The fact the mid-caps continue to out-perform the main stream stocks is a signal that there is enough positive momentum in the markets.
The Q1 results still dominate the equity markets as the indices keeps moving in a narrow band. The Sensex closed at 0.12% lower at 27803 and the Nifty remained unchanged at 8541 at the close of Friday last week.Going ahead, Q1 results are likely to remain as the key driver of markets this week too. However, profit booking and short covering can be expected in the markets as July derivatives expire in the coming week.
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