Markets are expected to remain range-bound on lack of triggers - Eastern Financiers

Markets next week are expected to remain range-bound due to lack of any major triggers amidst a truncated week of trade on account of Christmas holiday. Apart from some sector specific news-flows and global events, there are hardly any important cues for the markets to react to. Foreign flows, that have been supportive all-through this month, would be another crucial factor in deciding the market trajectory as the flows might ease-off a little due to the year-end profit booking by the overseas investors and the start of tapering translating into weaker allocations to emerging markets like us. Apart from these, the movement in the Indian rupee vis-à-vis other international currencies would also be taken note-off. Movement in the commodity prices, especially crude, will also have a bearing on market performance.

After this week's announcement of Sops in the form of interest free loans being okayed by the Group of ministers, the sugar sector would be in focus going into the next week's trading as well. Apart from the Rs.7000 Cr interest free loan, there are other proposals in the form of incentives to produce 4 million tonne of raw sugar and setting up of buffer stock, besides doubling ethanol blending in petrol to 10 per cent from the current 5 per cent, that are expected to be taken up in a second phase of ministerial panel meet next week. If these proposals, forwarded by the PM appointed committee on the sugar sector, are approved then the sugar stocks could be seen gaining momentum in next week's trading.

Another important sectoral data that would be on the investor's watch-list would be the credit & deposit growth data of the banking system. Amid tepid economic growth and weak demand, annual growth in bank credit fell to 14.2 per cent as of November-end. At the end of October, bank credit had recorded 16.1 per cent year-on-year growth. However, growth in deposit mobilization saw improvement. Year-on-year growth in deposits was 16.1 per cent as of November 29, against 15.4 per cent at the end of October. The recent trend in the advance tax numbers suggest that the banking sector is expected to see steady pick-up in credit, going forward and the RBI has said that it is confident that the credit growth for the fiscal would be in-line with its expectations of 15-percent uptick and could even exceed it. If the credit growth continues to remain satisfactory, stocks in the banking sector would react positively to it.

Globally, there would a lot of important data announcement next week and investors would be particularly watching data points from the US to see whether the economy continues to gain traction. Crucial data points that would shape the Global market trajectory includes US Personal income, US Consumer spending & inflation expectations, Italian consumer confidence, US core durable orders, US New home sales, Japan housing starts & Industrial production, etc.

Source : Equity Bulls

Keywords