Geopolitical issues to dictate market

Spooked by geo political crises in West Asia and Korean peninsula, disappointing IIP data and dismal start to the earnings season from Infosys results saw markets snap a two-week winning streak to end lower during the week ended.

Benchmark indices the Sensex and the Nifty closed 245 points and 48 points lower at 29,461 and 9,150 respectively.

However, heightened activity in mid cap and small cap counters helped the BSE mid-cap and smallcap indices gain 0.8% and 1.4%. Outperformance by mid-caps and small-caps would continue for some more time say punters.

Emboldened by strong inflows, domestic institutions continued to pump in money into the markets. Analysts feel that the country is in a unique position and is one of the very few economies that are undertaking transformational reforms that would be building blocks for sustained long term growth. Predictions of below-normal Monsoon, however, remain a cause of concern.

The results season will be in full swing as few heavyweights would come out with quarterly earnings this week. Among macroeconomic data, WPI data for March is also scheduled to be announced.

The dollar dropped 0.7%, a major move, after Trump told that the dollar is “getting too strong.”

Near-term trend will be dictated by the geopolitical issues, Q4 earnings, predictions over monsoon, the dollar-rupee exchange rate, investment pattern of FIIs and international crude oil prices.

For the week ahead, chartists predict trading range of 28,850-29,950 and 8,975-9,325 for the indices. Key supports are at 29,200 & 28,950 and 9,075 & 9,000.