Markets are expected to open flat and may remain volatile ahead of GDP data and diesel and cooking price hike expected this week. The Nifty futures on the Singapore Exchange were up 8 points, at 5,480.
Analysts said that pullback rally which began last Thursday may last only for a short time. If the government reports a higher GDP, it may cause Reserve Bank of India to continue its tightening cycle which will again weigh on the markets.
Sanjeev Zarbade, Vice-president (Private Client Group Research) from Kotak Securities said, “we expect the markets to be range-bound and move sideways in the absence of any major trigger.” Addtionally commodities have seen some unwinding of speculative positions, which is resulting in softer prices. Zarbade added, “If this trend continues, then it will be a positive for the Indian economy and will help contain inflation. It might also attract FII flows given valuations have turned reasonable.”
Across Asia markets were trading mixed. Japanese stocks started the week lower, with strength in the yen and foreign selling weighing on the markets heavily. The Nikkei Stock Average fell 0.7% in early Monday trading but regained some of the lost ground later to trade flat with a negative bias at 9,517, down 0.05%. Shanghai Composite and Hang Seng were up 0.3% each.
Back in India Unitech will be closely watched after fourth quarter net profit fell 19% to Rs 568 crore due to cost pressures. Mahindra & Mahindra will be closely watched ahead of the fourth quarter results.
