Market eyes FIIs before Q3 results

Disheartened by washout of winter session in parliament, US Fed’s hawkish outlook, weak economic numbers and continued concerns over impact of demonetisation; markets witnessed selling again during the week ended.

Benchmark indices, the Sensex and the Nifty closed 257 points and 123 points lower at 26490 and 8139. It is interesting to observe that the Sensex fell by 1% but the Nifty corrected by 1.5%.

Winter session washout has increased fears of delay in GST rollout. Firm trends in international crude oil prices may ignite inflation again due to rise in domestic fuel rates. Analysts expect market slowdown to continue till the start of Q3 earnings season.

Demonetisation may hit growth for a few quarters but if it makes India’s tax to GDP ratio grow by around 50 bps because of the deposits that have come in the formal economy, it will be major positive say observers.

Near term direction of markets will be dictated by global cues, attitude of FIIs ahead of year end vacation, crude oil trends, movement of rupee and India’s drive against black money.

For the week ahead, chartists predict trading range of 26000-27000 and 7975-8300 for the benchmark indices. Support for the indices evident at 26225 & 26000 and 8050 & 7975.  Broad consolidation can be seen in the markets. Markets that trade in consolidations trends give up little in the way of consistent gains.