Stocks to take a cue from Q1FY18 results Market Khabar

Enthused by firm global markets, good progress of monsoon and expectations of rate cut in the next RBI meeting on the back of tepid inflation and IIP data; markets extended impressive gains for a second consecutive week during the week ended. The indices, the Sensex and the Nifty ended 660 points and 220 points higher to close at 32,020 and 9,886 respectively.

Despite higher closing of the midcap and smallcap indices, mild selling was seen in midcap and smallcap stocks suggesting lack of follow up buying at higher levels.

Looking at the impact of fallout of demonetisation and GST, don’t expect a great Q2 earnings season say observers. Expect firm recovery trend only by December when earnings will revive after GST is implemented in full swing.

Analysts anticipate slower, but still healthy, growth from the earnings season that is in focus. Change of financial year to Jan.-Dec. is likely to be announced in the monsoon session.

Near term direction of markets will be dictated by geo-political issues, progress of monsoon, Q1 earnings and global cues.

US markets received a boost from the Federal Reserve after Janet Yellen reiterated that she’s in no rush to raise interest rates. The “irrational exuberance” across the global markets is attributed to excessive liquidity, low inflation, improving earnings around the globe, and the accommodative Fed.

Market players suggest caution and not to get carried away by the “bubbly” times. For the week ahead, chartists predict trading range of 31,500-32,450 and 9,675-10,075 for the benchmark indices. Support for the indices evident at 31,750 & 31,500 and 9,800 & 9,700.