Subdued quarterly earnings likely to weigh heavy on equities markets (Market Outlook)
Mumbai, March 29 (IANS) Lack of any positive trigger, coupled with expectations of subdued quarterly results, might lead to further consolidation in the Indian markets in the coming week.
"With F&O (future and options) expiry (which happens on the third Friday of every month) and a short working week with just three working days and one day without clearing, the expectation is that the markets are going to be trading in a very narrow range," Geojit BNP Paribas vice president Gaurang Shah told IANS.
The Indian markets will remain closed on April 2-3 on account of Mahavir Jayanti and Good Friday.
According to Shah, post the five-to six percent correction on the index which had earlier witnessed lifetime highs, the downside would be very much limited and the recovery thereafter will be slow and shallow with a huge amount of time spent in consolidation.
Other analysts said that April is likely to see a volatile start given the negative return of minus seven percent in March.
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"Going ahead, there are no immediate triggers for the markets on the domestic front and hence, markets may continue to be dictated by global factors. Further action on the fiscal or monetary front, if any, can give some upside to the market," Dipen Shah, head of private client group research at Kotak Securities, told IANS.
"However, we remain positive on the medium-to-long term prospects of the markets based on our expectations of further fiscal reforms and a pick-up in the economic growth over the period," he added.
The expected subdued January-March quarterly results are also expected to play a spoiler for the markets to return to the recovery path.
"The markets are looking forward to the fourth quarter results. The expectations are that the results might not be that exciting," Devendra Nevgi, chief executive of ZyFin Advisors, told IANS.
According to Nevgi, global cues would be watched by the markets for insights on further developments. The prices of gold and oil will also be keenly observed.
Other triggers for the markets in the coming week will be concerns on the marginal increase in retail inflation for February which belied expectations of a rate cut next month.
The Reserve Bank of India (RBI) is scheduled to announce its first bi-monthly policy review for 2015 on April 7.
"On the RBI policy front we do not expect any rate cuts to come through this time and the statement of the RBI governor is what the participants will be looking forward to," Shah of Geojit BNP Paribas said.
"The only positive that one can take home is the revenue collection by the government on account of auctioning coal mines and spectrum," Shah added.
Meanwhile, a key equities market consolidated for the third straight week. It fell 802.44 points or 2.83 percent during the weekly trade session ended March 27.
The S&P BSE Sensex ended its March 27 trade at 27,458.64 points. For the previous weekly trade ended March 20, it had closed at 28,261.08 points.
The 30-scrip Sensex had lost 242.22 points or 0.84 percent during the weekly session ended March 20.
The Sensex ended its March 20 trade at 28,261.08 points from its 28,503.30 points close in the weekly trade ended March 13.
The consolidation in the Indian markets continued since the weekly close of March 13, when the Sensex plunged 945.65 points or 3.21 percent to its worst weekly fall in 2015.