Expert Zone

Straight from the Specialists

Global cues likely to dominate market

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The Indian market ended with minor gains in a truncated week as data showing slowdown in growth in the services sector in March and weak global stocks hurt sentiment.

Growth in the Indian services sector slipped to a five-month low in March as optimism about the business outlook in the coming year faded to its weakest level since 2009. According to HSBC’s India PMI, service sector activity fell sharply to 52.3 in March from 56.5 the previous month, though it remained above the 50 level that divides growth from contraction for the fifth month. Momentum in the services sector eased on account of lack of economic policy progress and continued high inflation which is expected to remain elevated due to factors such as high crude oil prices. Thus, we feel that the Reserve Bank of India is likely to approach policy easing cautiously as the upside risks to inflation remain.

Coal India was the story of the week as the government issued a rare presidential decree to force Coal India to sign fuel supply agreements, binding it to provide at least 80 percent of the coal required by power plants. This is part of the government’s efforts to revive the ailing Indian power sector. This further confirms the fears of foreign institutional investors about corporate governance issues and one of them has already filed a complaint regarding the Coal India issue. India may be having one of the largest coal reserves in the world, but it still has to import its coal requirements as Coal India is unable to fully exploit the reserves which results in demand outstripping supply. Opening up of coal mining to the private sector in the last few years has resulted in the Comptroller & Auditor General of India (CAG) suggesting another scam. Hence the demand/supply gap is expected to continue in the foreseeable future.

India Market Weekahead: Brace for volatility within a range

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

It was a topsy-turvy week for markets as the benchmark indices hovered between positive and negative territory to finally end with a loss of 0.7 percent. A lacklustre budget initially triggered the weakness followed by a spate of negative events resulting in a fifth consecutive week of decline for the markets. The newly appointed railway minister’s move to roll back fares also unnerved investors.

India Market Weekahead: Global markets, FII action to be primary drivers

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

It was a flattish close for the markets in what was supposed to be an eventful week. But the biggest event — the budget – turned out to be a non-event.

It’s Budget week but be ready to book profits

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The markets ended in negative territory for the third straight week after the ruling Congress party suffered a setback in the recently held assembly elections, clouding the government’s ability to push major economic reforms. However, a sharp pullback of 2 percent seen on Friday saved the indexes from suffering major losses.

Brace for volatility, but utilise opportunity

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

After a 21 percent run so far this year due to unabated liquidity flow, markets paused for two weeks in a row with a cut of close to 5 percent. Data showing a slowdown in GDP growth in Q3 December spooked investors while macroeconomic worries arising from high oil prices also weighed on sentiments.

India Market Weekahead: Need for caution as correction may be steep

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The Nifty extended its rally for the seventh consecutive week to touch 5600, returning 3 pct for the week and making it one of the best market rallies in recent times. The bourse continued to show strength on signs that euro zone officials would approve a long-awaited bailout for Greece next week to avoid any disorderly default.

‘Sense of disbelief’ in markets to extend current rally

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

As they say, it is always darkest before the dawn. Equity markets seem to be the finest proponents of this axiom. They have a habit of surprising investors. What we have seen so far in 2012 sums it up pretty well.

India Market Weekahead: Too good to last much longer

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The market has continued its upward move for the sixth consecutive week, gaining over 15 pct in 2012 and 20 pct over its December bottom without any worthwhile correction. The excellent market rally during the past few weeks is helped by global liquidity and strong FII inflows. However, mild profit booking was seen as the Nifty approached the all important resistance zone of 5400-5450.

Sensex on the bounce

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The year 2012 has begun well for the stock market. In just six weeks, the Sensex was up 13 percent which made up more than a half of the fall in the previous 52 weeks. Will this trend survive the rest of the year?

India Market Weekahead: Use opportunity to partially book profits

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Markets surged over 2 pct during the week and are up 14 pct YTD driven by liquidity inflows from foreign investors, a CRR cut by the RBI, hopes of interest rate cuts in coming months, positive economic data and the government’s intention to kick-start the process on the policy front. The rally was unaffected by the court verdict on the 2G scam and the indices resumed an upward march.

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