Global Markets ended on a strong note this week - Sanjeev Zarbade, Vice President - PCG Research, Kotak Securities

Sanjeev Zarbade, Vice President - PCG Research, Kotak Securities

"Global markets ended on a strong note this week, as they reacted positively to Fed Chairperson Janet Yellen's comments on the pace of rate hikes. Yellen said the Fed is concerned about low inflation and would alter policy if it sees a longer-term trend. Fed officials had previously been emphasizing that they believe the low inflation readings are transitory. This essentially meant that in view of the tepid inflation, rate increases would be gradual. This led to a sell-off in bond yields and a relief rally in global equities.

Indian equities outperformed global benchmarks despite some geopolitical concerns. CPI data for the month of June continued to be soft despite reports of a spike in fruits and vegetables prices. This along with the weak IIP number, opens the door for a possible rate cut in the August monetary policy meeting. Among corporate earnings, TCS reported weak set of numbers.

FII flow was negative for the week. We recommend investors to guard against chasing momentum in the market and focus on quality stocks".

Source : Equity Bulls

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