Inflation, FII flows, budget to drive markets
MUMBAI: Inflation data based on wholesale price index (WPI) and investment trend by foreign funds are likely to drive the benchmark bourses in the week ahead, say experts.
The benchmark Bombay Stock Exchange Sensex and the broader National Stock Exchange Nifty are likely to see choppy trade on Monday as analysts expect volatility ahead of the budget.
State-owned oil marketing companies will also be in focus as investors track global crude oil rates.
“Going ahead, global cues and economic developments shall be driving force for the markets,” said Rakesh Goyal, senior vicepresident, Bonanza Portfolio. Underlining that the budget is an important market-moving factor, he said, “We can expect volatility ahead of the budget outcome.”
Experts also expect profitbooking as the Sensex and Nifty on Friday logged the fourth successive session of gains and returned to the 29,000- and 8,800-level respectively, on the back of positive global cues — including easing concerns over Greece.
Stock-specific action is also indicated as companies such as Ambuja Cements and Crompton Greaves will announce quarterly earnings this week.
Investors are keenly focussing on the new government’s first full-year budget, and are treating it as a gauge of its reforms momentum.
“The pre-budget expectations will start building up and the corresponding sectors may see increased interest,” said Dipen Shah, head (private client group research), Kotak Securities. Shah added that he believe the budget will emphasise on Make in India, infrastructure growth, non-adversial taxation and other reforms.
“We also expect the finance minister to adhere to the fiscal consolidation path,” Shah added.
Among the sectoral indices, traders are likely to prefer IT, FMCG and pharma, alongside selective banking, infra and auto stocks for fresh long positions, according to Religare Securities.
Foreign Institutional Investors (FIIs) have bought shares worth `3,167 crore in February so far.
(With PTI inputs)