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from Expert Zone:

India Markets Weekahead: ‎Tough for the Nifty to break out of its range

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The Nifty continued its upward trajectory to close at a two-week high of 7,792 in a holiday-truncated week. However, this optimism was not reflected in the broader market, especially the mid caps and small caps.

Among the sectors, public sector banks, realty, infrastructure and capital goods, which led the rally earlier, have underperformed in the last few weeks whereas defensives such as FMCG, pharma and IT stood out, an irony when markets are close to a record high.

Macro data released during the week wasn't encouraging with consumer inflation, especially food inflation, continued to soar whereas IIP data indicated a renewed slowdown. Exports data released on Thursday indicated that they grew faster than imports, though the deficit touched a high of $12.2 billion.

The Nifty has been in a broad range of 7,500-7,850 since the last two months despite FII. flows of about $2.3 billion during the period. This can be attributed to a lack of substantial triggers to push the markets into a new zone. The hopes and expectations of investors with the new government were reaffirmed with the statement of intent but it seems the markets would await the execution of that intent to break out of the range.

from Expert Zone:

‎India Markets Weekahead: Correction could follow budget week

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Last week's robust pre-budget rally belied expectations, with the Nifty closing up more than 3 percent at a record high of 7,751‎. Automobile sales, manufacturing PMI as well as services PMI showed an uptick. The Iraq turmoil seems to have taken a back seat with oil prices receding from a nine-month peak. A rally in world markets, with life highs for the DJIA and S&P 500, also aided sentiment.

India's fiscal deficit in the first two months has already touched 45.6 percent of the full-year target. Though this would have been a negative indicator, the markets welcomed Finance Minister Arun Jaitley’s remarks about focusing on fiscal consolidation against "mindless populism".

from Expert Zone:

India Markets Weekahead: Wait for post-budget opportunities

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Markets were fairly volatile last week, reacting to tough measures taken by the Narendra Modi government to get India’s economy back on track amid worries over monsoon rains and the situation in Iraq.
cfcd208495d565ef66e7dff9f98764da.jpgLong-term investors hailed the hike in railway freight and passenger fares as a step in the right direction to bring down indirect subsidies. However, the government rolled back the hikes on suburban fares to a large extent due to political considerations.

Monsoon rains have started on a weak note but if the rains pick up in July and the El Nino effect is tempered, it would have a direct impact on inflation and interest rates.

from Expert Zone:

India Markets Weekahead: Pre-budget rally may be muted

A man looks at a screen across the road displaying the election results on the facade of the Bombay Stock Exchange (BSE) building in Mumbai May 16, 2014. REUTERS/Danish Siddiqui/Files(Any opinions expressed here are those of the author and not of Thomson Reuters)

The Nifty touched a new high of 7,700 before cracking on Friday to slip about 0.5 percent for the week. This was primarily triggered by the unrest in Iraq and the subsequent rise in crude prices.

The markets were also overbought aided by a relentless rally since May 9‎, with the CNX Nifty climbing about 16 percent, S&P BSE Midcap Index rising 26 percent and the S&P BSE Small cap index jumping 35 percent. The last one-month saw 115 multi-baggers with 92 percent of traded stocks gaining during the period. The probability of picking a loser was minimal. It seemed making money had never been so easy.

from Expert Zone:

India Market Weekahead: Time to take some profits off the table

(Any opinions expressed here are those of the author and not of Thomson Reuters)

A rally of hope tempered by caution pushed the Nifty 1.2 percent up to 6,776 for the week. Investors believe the worst is over and a new government would be the catalyst for a sustained economic upturn. In election season, hope for a better tomorrow helps the market ignore ground realities.

A record turnout in the ongoing general election is being seen as an anti-incumbency vote. As the market continues moving up, investor hopes for a stable government get priced in, leaving hardly any room for a disappointment. On the other hand, fence sitters who got left out of the rally will join the fray, adding to the momentum already built by investors.

from Expert Zone:

India Markets Weekahead: ‎Ride the election rally but skim the profits

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The market began the week on a high note after an extended weekend but could not sustain the rally due to profit booking. The Nifty was at a high of 6570 on Tuesday but the rest of the trading days remained lackluster and it ended the week with a marginal loss - at 6495 after the extended trading session on Saturday.

Although the week was marked with heightened political activity as candidates for the general election were announced, the U.S Federal Reserve had a sobering effect on the markets. The Fed decision to continue with further tapering of $10 billion and focus on interest rates, which should start rising sooner than expected, saw corrections in most markets as the dollar strengthened.

from Expert Zone:

India Markets Weekahead: Markets move into pre-election rally

(Any opinions expressed here are those of the author and not of Thomson Reuters)

A spectacular rally in the last few days has put the market in a pre-election mode, buoyant with hopes of a stable and reform-oriented government. Led by institutional buying and the resultant short squeeze, the markets rallied more than 3 percent in the last two trading sessions - closing the week at 6526, a record high for Nifty. The markets seemed to have moved into a new territory with metals, realty, banking, capital goods, infrastructure and energy sectors participating in the rally.

 Generally, the data points for a pre-election rally are the developments on political activities and opinion polls. The economic data takes a backseat in this “rally of hope” and markets take a keen interest in electoral analysis.

from Expert Zone:

India Markets Weekahead: Markets back on track for pre-election rally

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The week started on a sombre note but with institutional activity picking up, the Nifty closed with gains of 1.97 percent at 6276 despite a mid-week trading holiday. Political activity also gained momentum with 11 parties coming together to form a Third Front to oppose both national parties.

 

The Election Commission may announce election dates in the coming week -- the code of conduct coming in will halt any policy decisions.

from Expert Zone:

India Markets Weekahead: It’s time again for an election year ‘rally of hope’

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Despite a volatile Friday, it was a good week for the markets and saw the Nifty close about 90 points higher at 6,261, with sentiment supported by better-than-expected quarterly results and benign inflation data.

The few earnings that disappointed investors seemed to affect specific stocks without having a bearing on either the sector or the markets.

from Expert Zone:

Time to ride the rally in the run-up to 2014 elections

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Election fever in the world’s biggest democracy is gripping India in the run-up to general elections due in 2014. In the coming months, politics will be in focus especially among investors.

Assembly elections in Chhattisgarh, Delhi, Madhya Pradesh and Rajasthan were a prelude to next year's election. The four states make up 72 seats in the Lok Sabha. Historical data suggests the electorate votes on the same lines for the Lok Sabha in case state polls are held within 12 months of the general elections.

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