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Markets are likely to open on a cautious note following mixed cues from global markets. They are also likely to react to the fiscal deficit and revenue deficit for the year ended March announced over the weekend. At 8:30am, SGX Nifty was trading flat at 8,273 levels, up a marginal 4 points.
The finance ministry has pegged fiscal deficit for 2014-15 at 4% of the gross domestic product (GDP), reports suggest. The revised estimate presented in February had pegged it at 4.1%.
Last week, while the gains in the benchmark indices – the S&P BSE Sensex and the CNX Nifty – were restricted to under 1%, the CNX Mid-cap index rallied around 3.5%. Among sectoral indices, except the metals index (down 0.5%), all the other sector indices ended the week in the positive with the CNX Auto index outperforming with a gain of over 4%.
EXPERT’S VIEW
Going ahead, remaining quarterly results, distribution of monsoon and pick-up in investment activity, if any, will dictate market sentiment and so will expectations of a US rate hike, analysts say.
“While the market has shown signs of stability on week-on-week basis, even as the intra-week volatility has been exceptionally high, it is yet early to assume that the short-term trend for the market has reversed for good. Thus, traders should continue to exercise caution and adopt disciplined trading actions. As for investors, there are stocks available across sectors at attractive medium-to-long-term valuation, which should be accumulated,” said Hitesh Agrawal, head research, at Reliance Securities in a note.
Technical chartists suggest that 8,360 barrier for the Nifty continues to appear stiff, which could mean that despite oscillators’ position being accommodative towards an upswing, the potential for a break past this barrier looks limited. Sustained inability to clear 8,360 would also suggest that the 7,800 could drag indices lower.
CORPORATE RESULTS
The week saw also the conclusion of the Budget Session of Parliament, with some crucial bills being passed, which included the Coal Auction Bill, Insurance Bill, Black Money Bill, Mining Bill.
On the economic front, while the IIP growth slowed to 2.1% in March from 4.9% in the previous month, data showed last week, the CPI Inflation moderated to 4.9% in April against the 5.2% in the previous month. Softening of both these indicators has raised hopes amongst market participants of a possible rate cut by the Reserve Bank of India (RBI).
Among key results, Asian Paints, Tata Power, Tata Steel, Bajaj Auto, Coal India, ITC and State Bank of India (SBI) are some of the companies that will announce their quarterly results this week.
GLOBAL MARKETS
Japan's Nikkei share average rose on Monday morning to a two-and-a-half-week high, bolstered by gains in the insurance sector after Dai-ichi Life announced higher shareholder payouts. The Nikkei 225 gained 0.5% to 19,828 after rising as high as 19,849, its highest level since April 30.
However, China’s stocks fell for a second day, led by commodity and financial companies, amid concern a flood of new share sales will lure funds from existing equities. The Shanghai Composite Index dropped 0.6% to 4,283.29, adding to Friday’s 1.6% decline. According to reports, 20 companies are scheduled to sell initial public offering (IPO) shares from Tuesday to Thursday, which may freeze 2.8 trillion yuan ($451.1 billion).
