Market to track monsoon for direction

Spooked by rebound in crude oil prices, heightened volatility in rupee, escalation of US China trade war and renewed selling in midand smallcap segments kept the markets weak during the week ended.

Indian equities were the only ones in Asia adding value in the two weeks through June 21. Sensex closed 266 points lower at 35,423 and Nifty ended 108 points lower at 10,714.

Broader markets continued to see correction for the second week. Mid- & small-cap stocks that were under pressure for the last few weeks saw further weakness dampening the sentiment.

Continuing their stance, FIIs remained sellers in the cash segment but were seen hedging their positions by remaining buyers in the derivatives segment, while DIIs were seen supporting the markets at lower levels.

After the announcement of an increase in supply by Opec and its allies, oil prices corrected sharply from a three-and-a-halfyear high of $80.50 a barrel to around $73 a barrel. However the correction was short lived and prices are on rebound again.

Emerging market stocks and currencies posted their worst quarter since 2015 amid escalating trade war concern and weakness in China. The rupee dropped to a record low against the US dollar during the week ended.

Near term trend will be dictated by trade developments between US and China, progress of monsoon, domestic macro data, FII and DII activity, the movement of rupee, crude oil price movement and global cues.

For the week ahead, chartists predict trading range of 34,750-36,000 and 10,475-10,900 for the indices.