The week ahead: Markets likely to stay flat..

key indices, the Sensex and the Nifty closed the previous week in red as the Fed reserve chairperson Janet Yellen’s review speech kept the markets on the edge. There is no doubt that a rate hike would not be a good thing for emerging markets since the probability of mass pull out of funds from economies like India are very much on cards if the rate hike is a reality.

Going ahead, earnings numbers from DLF, MOIL, IOC and BPCL are likely to hit the markets this week. Auto stocks will also be on focus as the companies will be declaring the auto sales figures towards the weekend.

Investors must be careful in investing large cap stocks since further downsides are possible in the coming months. However they may consider investing in select mid cap and small cap stocks. Midcaps and small caps have been rewarding the investors handsomely in the past one year .With the seventh pay commission,   one rank one pension scheme and good monsoon season,  spending power of the common man is set to rise in both rural and urban areas. Financial lending institutions are likely to gain from this boost and hence, we believe that this is one sector that may be benefitted the most in the coming months along with auto and FMCG sectors.

For the week ahead, we expect a trading range of 27200-28000 for the Sensex and 8,400-8,600 for the Nifty. Key events to watch out includes Auto sales numbers, new flow about Fed rate hikes, US August employment data and crude oil price movement.

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