Markets recorded biggest weekly fall in 2015 due to the fears of higher retail inflation forcing RBI go slow on expected interest rate cut. Both the benchmark indices — the Sensex and the Nifty — fell by over three per cent to close at 28,503 and 8,648.
Punters indicate liquidity crunch on fiscal-end concerns and the rumours of many short term traders stuck at higher levels facing near default have dampened sentiment. While plunging oil prices are positive, resurgent dollar is a big threat for economies of many countries.
Global investors will be looking for clues from US Fed about when it will raise interest rates as well as any commentary on the dollar, oil and all the recent economic data. The Fed could signal a June increase is in the cards if it removes the word “patient” from its statement.
Keep an eye on corporate advance tax data, which could provide cues on Q4 earnings. Inflation data, global cues and developments in Parliam-ent would dictate the near-term trend of the markets. For the week ahead, chartists predict a trading range of 27,900 and 28,900 for the Sensex and 8,480 and 8,780 for the Nifty. Supports for indices are at 28,150 and 27,900 and 8,580 and 8,510. Use corrections to incr-ease exposure in quality stocks having good visibility of earnings.
In stock market, it’s not enough to have your own view; you have to consider what other people think. Investing is interactive, probabilistic and noisy. As a result, successful decision making requires an investor to have a good grasp of psychology.
