Q2 results, stock movements to set tone

Buoyed by rollout of GST, good progress of monsoon, expectations of early resolution of NPA problems of PSU banks and strong price action in some index counters; markets logged impressive gains during the week ended. The benchmark indices, the Sensex and the Nifty ended 439 points and 145 points higher to close at 31,360 and 9,665 respectively.

Market breadth was good and both the midcap and smallcap indices gained over 2 per cent and 2.7 per cent for the week.

Heightened frenzy trading was seen in several stocks. Avoid cats and dogs and stick to quality stocks.

Coming week will witness announcement of macro economic data like IIP, WPI and CPI.  Improvement in macro data may provide legroom to RBI for interest rate cut in the coming monetary policy.

Concerns on the potential impact from populist farmer bailouts being engineered by different state governments may impact RBI policy, say observers.

Geopolitical tensions are back on radar. Track developments on China front.
Next major round of financial reforms are expected in the monsoon session after the election of the President.

There was a fair bit of negativity in some global markets last week, but the gloomy mood has turned optimistic over the weekend following the release of better-than-expected US job numbers and outcome of G20 conclave.

With focus on Q2 results season, market movement in near term will be dictated by stock specific moves.

For the week ahead, chartists predict trading range of 30,750-31,800 and 9,475-9,825 for the indices. Support for the indices evident at 31,075 & 30,750 and 9,575 & 9,385.