The week ahead: Q3 and the budget expectations to dictate the market moves.

Optimism on Q3 results, continuous flow of foreign funds and positive expectations over the upcoming budget kept the market ticking higher for the week ended. Markets closed in green for the second consecutive week. Both the Sensex and the nifty closed the week by gaining 1.28% and 1.16% to settle at 34,592.39 and 10681.25 respectively.

Going ahead, the direction of the market will be dictated by the Q3 results season, crude oil prices and expectations over the budget. The compulsions of giving a rural bias in the budget is something that the market participants are worried about and hence more volatility is expected in the markets as the date draws near.

The present Bull Run is giving good opportunities for investors to book some profits and, we believe that some profits must be booked at this stage. The Oil rates which had hit USD 70 per barrel last week is an indication that the 3 year gift that we enjoyed in terms of low oil prices is now coming to an end. This in turn, will put a lot of pressure on the finances and inflation figures in the near future. So any slight trigger such as earnings disappointments or a budget that fails to please everyone can cause the markets to correct

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