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Jul 30, 2012, 09.22 AM IST
As we head into this action-packed week, the view is that equities are going to remain highly volatile due to the RBI's monetary policy review and ongoing corporate earnings.
It was a strong close for the market on Friday, with the Nifty gaining 57 points to end at 5,100. However, experts say market momentum has faded due to renewed eurozone fears and domestic headwinds, such as lack of policy action from the government, weak monsoon and its impact on inflation.
The Indian Meteorological Department says that the rain will decrease over central and East India in second half of this week, but could increase in parts of Northwest. Meanwhile, the agriculture secretary says that the monsoon rains could be 21-22% below average until July-end.
So as we head into this action-packed week, the view is that equities are going to remain highly volatile due to the RBI's monetary policy review and ongoing corporate earnings.
Stocks in News
Market regulator SEBI swung into action after last week's midcap mayhem to put six stocks under a 5% circuit filter. It has also begun investigating to find the reason for the volatility in those stocks. So keep an eye out on Tulip Telecom, Glyodyne, Radico Khaitan, Pipavav Defence, Parsvnath and Era Infra.
CNBC-TV18 learns that the revenue department is set to move a note on hiking diesel car excise. The ministry is of the opinion that the current economic condition will make it difficult for a tax hike.
Suzlon fully redeems foreign currency convertible bonds worth USD 360 million via internal accruals and fresh loans,
The Gujarat government defroze Essar Oil's bank accounts after the company deposited Rs 1,000 crore with the government as asked by the Supreme Court.
USFDA has lifted the import alert from Dr Reddy's Mexico manufacturing facility.
Automobile and cement stocks will be in focus this week as companies from these two sectors will unveil monthly sales data from August 1.
US markets closed out a volatile week with sharp gains, with the Dow crossing above 13,000 for the first time since May. Hopes that the Federal Reserve and the European Central Bank may provide further stimulus to prop up the global economy boosted sentiment.
The Dow and S&P closed on Friday at a two and a half month high. For the week, the Dow and S&P closed with nearly 2% gains, while the Nasdaq moved 1% higher.
On the economic front, US GDP expanded at a 1.5% annual rate in the second quarter. The reading was better than expected, but still it marked the weakest pace of growth since the third quarter of last year.
Meanwhile, consumer sentiment came in slightly better than expected in July, but is still at its lowest level this year.
European markets also saw strong gains on hopes of further stimulus from the ECB and action from policymakers in support of the euro.
The DAX, CAC and FTSE gained around 1-2.5%, but it was the broader markets like Spain and Italy that saw greater gains.
It's going to be a key week for global markets with the Federal Reserve meeting on Tuesday. Analysts are split on whether the Fed will come out with more stimulus come Wednesday when they make an announcement. Some believe chairman Ben Bernanke and company will likely wait for more evidence of a deteriorating US economy.
Also watch out for the key US jobs data will be released next Friday.
Investors will be watching out for the ECB monetary decision on Thursday, especially after ECB president Mario Draghi said he is ready to do everything possible to help out the eurozone. Overnight, a similar message came in from euro group president Jean Claude Juncker, who promised to act with the ECB and said that we can expect decision from policymakers in the next couple of days.
The euro hit a high of 1.239 to the dollar on Friday, but pared gains to close 0.3% higher at 1.232. Meanwhile, the dollar index saw some weakness, falling below the 83 mark.
Back home, the rupee saw a volatile week, moving above the 56 level. On Friday, however, it closed at 55.34 to the dollar.
Brent crude held above USD 106 dollar per barrel on hopes for more stimulus from the US. For the week, crude prices were largely stable.
From the precious metals space, gold rallied on stimulus hopes.
Tags: market, Nifty, Sensex, NSE, BSE, RBI monetary policy, US Federal Reserve, European Central Bank, monsoon, policy action
Jun 18 2013, 10:41
- in FII View
Jun 18 2013, 10:41
- in Stocks Views