Global cues to dictate market movement

Despite better than expected GDP data, the markets, unnerved by PSU bank related developments and weak global cues, closed marginally lower during the week ended. Benchmark indices Sensex and Nifty closed 95 points and 33 points lower at 34,047 and 10,458 respectively. Bank Nifty slumped by 400 points to 24903.

The election result over the weekend, particularly from Tripura, has come as a shot in the arm for the ruling party, but this is likely to have only marginal impact on markets on Monday. The market will discount economic news more than political news from now.

More significant will be the election outcome in Karnataka, MP & Rajasthan that will set the trend for the general election in 2019, say punters.

With decisive victory in Tripura and solid gains in both vote share and seats in Nagaland and Meghalaya; the government should go for faster execution of reforms.

Bond markets are in volatile phase. Liquidity has already reached a stage where the rise in government balances is leading to a deficit in the banking system liquidity.

While redemption of market stabilisation bonds will add liquidity in mid-March, advance corporate tax outflows will be large enough to widen the deficit, say observers.

The near-term trend will be dictated by PSU bankrelated developments, domestic and global macro data, developments in the Budget Session, trend in global markets, investment by FIIs and DIIs, the movement of rupee and crude oil price movement.

For the week ahead, chartists predict trading range of 33,500-34,500 and 10,300-10,600.