The week ahead: Q4 results and FIIs will be the key drivers.

For the 4th consecutive week, the Indian benchmark indices – the Sensex and the Nifty – have extended its gains to close at 34416 and 10,564 respectively. Forecast of a normal monsoon, good Q4 results and strong inflow from DIIs helped the indices to stay positive. However, the rise in crude oil prices and weakening rupee are threats to this party.

Going ahead, The rise in oil prices – diesel prices have hit all time high and petrol prices have hit a 5 year high – can bring back the threat of inflation which will affect the lives of ordinary people. The near term trend in the markets would be mostly decided by Q4 results and the progress of monsoon. FII and DII activity , F&O settlement for April derivative contracts , ECB rate decision , Bank of Japan’s take on interest rates , movement of the rupee and Oil prices are some of the other parameters to be watched during the week. If the indices break the key hurdles at 34,500 (Sensex) and 10,700(nifty) – the upward momentum is likely to continue for some more time before cooling off. That said, Markets are expected to open low following the cues from Asia with SGX Nifty trading down over 0.5%.

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