We expect markets to extend last week’s volatility. Both Rail Budget and Union Budget failed to woo the investors despite being delivered along the expected lines. The markets in the coming week will also seek direction from two important data announcements – the WPI and the Bank deposits as also credit growth. The news of stronger industrial output growth in May due to improved performance of manufacturing, mining and power sectors and higher output of capital goods came after market hours on Friday. We hope to see its positive impact on the markets on Monday and expect the markets to start the week on a positive note.
Threats of drought have started to emerge due to poor monsoon, this might act as a dampener for investor’s sentiment.
The markets will also keep a watch on how things pan out on the Portugal front. Any negative development has the potential of causing FII sell off in the Indian markets which could lead to significant correction. On the whole we expect to see some positive action in the Indian bourses during the ensuing week, after last week’s correction.
Coming to sectors we expect PSU Banks to continue to remain in focus. We also expect to see some action in Pharma, Telecom and IT segments.
On the global front, a mounting crisis at one of Portugal’s biggest banks and signs of a deepening economic slowdown in Europe have kept investors sentiment in the negative zone the world over. We expect the US markets to start the week on a subdued note.
The European markets are also likely to remain subdued on the back of emerging tussle between the US and two prominent banks in Germany. To make situation worse Portugal’s Banco Espirito Santo is facing fund crunches. Although Portugal’s central bank has sought to stabilize investors’ sentiments by stating that Banco Espirito Santo does not need extra funds, the European markets will continue to remain wary.
The Asian markets are expected to remain range bound as investors trade cautiously on worries about the soundness of the bank in Portugal that raised the spectre of more financial turmoil in Europe.
The world markets would also be impacted by the slew of economic data that would be announced during the course of the week. Some of the important data announcements during the coming week include the US Jobless Data, US Industrial Production, US Mortgage Rates and Capital Inflow Data, US Chain Store Sales & Retail Sales, UK Inflation, Bank Of Japan’s Rate Decision, EU Industrial Production and Balance of Trade.
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(Working as Head-Research at Eastern Financiers Ltd, am a post graduate in commerce from Calcutta University, and have gained wide experience in the last 18 years. Prior to joining Eastern Financiers, I have gained in depth knowledge of the Financial Markets while working with Capital Market Publishers, Lohia Securities & CD Equisearch. As head of the Equity Research Wing, I appear regularly as Guest Analyst at CNBC, Awaaz, CNN-IBN, NDTV Profit , Zee Business,Bloomberg UTV, ET Now & R Plus.)