IIP, inflation to set market trends Market Khabar

After touching record highs on the back of reforms for NPA resolution, good earnings, status quo by US Fed and new steel policy; markets lost steam on the last trading day of the week ended to close on a negative note. Losing marginally, the Benchmark indices the Sensex and the Nifty ended just 59 points and 19 points lower at 29,859 and 9,285 respectively.

Lack of follow up buying and sustained profit booking kept market breadth negative. Sharp selling from FIIs dampened sentiment. But for the support lent by DII, markets would have corrected much more.

With the roadmap cleared for the rollout of GST, focus of market players is now on Q4 results and Monsoon. Analysts say implementation of GST and the logistics of overhauling India’s tax system are likely to make any tax changes by US President look easy by comparison.

Near term direction will be dictated by macroeconomic data like IIP, Inflation, rupee-dollar movement, Q4 earnings, crude oil prices and global cues like French election outcome, BOJ policy and Chinese inflation.

During the course of week ended crude oil plummeted below $45 a barrel marking yet another reversal in the notoriously boom to bust industry. However, analysts express confidence that oil prices will eventually head higher.

European market moves suggest that the investors expect Emmanuel Macron to triumph in the presidential runoff, an outcome that would remove the risk of France dropping the euro anytime soon. For the week ahead, chartists predict trading range of 29,400-30,250 and 9,100-9,450 for the benchmark indices. Support is evident at 29,600 & 29,400 and 9,200 & 9,115.