Last week, the markets started on a weak note and went through a correction after the announcement of a lower-than-expected Index of Industrial Production (IIP) number. However, they consolidated and made fresh moves towards key resistance zone (6,000 for the Nifty and 20,000 for the Sensex) in the latter part of the week on the back of positive global cues, and higher expectations from the results season.
Analysts believe the fresh buying support from domestic and foreign institutional investors is keeping the undertone bullish in the markets. The political and economic situation in the global level is still turbulent. In Europe, the debt crisis is knocking on the doors of economically weaker nations.
On the other hand, Japan is yet to completely stop the radiation leak from its damaged nuclear reactor. The markets have appreciated significantly over the last few weeks and most of the positive factors are already been factored in the valuations. Investors should exercise caution and fresh investment decisions should be taken only after careful study of the results and management guidance.
These are some of the major developments of the previous week that are expected to drive the sentiments and market direction in the short to medium terms:
US economy improving
The US economy shows signs of a slow but consistent improvement. The creation of new jobs, which was a concern since the last few quarters, has also improved during the last few weeks. The early bird results of the first quarter of large US companies have been quite good so far, and have created positive sentiments in the markets.
Investors should track the first quarter results of large US companies. The results season in the US will influence the market sentiments across the globe.
IIP data
The growth in the Index of Industrial Production (IIP) for February fell to 3.6 per cent from 3.9 per cent in January. Lower growth in mining, power and consumer goods led to this drop in the IIP number. Investors should not read too much into the IIP numbers, as they look subdued due to the higher base effect of last year.
However, investors should certainly feel concerned about the lower IIP growth to some extent. The series of interest rate hikes by the Reserve Bank of India (RBI) have certainly played a role in denting the industrial growth and have resulted in the lower IIP number. Analysts believe a further rise in interest rates from the current levels will dent the growth in the manufacturing sector some more and that is not a good sign for a growing economy.
Analysts believe the fresh buying support from domestic and foreign institutional investors is keeping the undertone bullish in the markets. The political and economic situation in the global level is still turbulent. In Europe, the debt crisis is knocking on the doors of economically weaker nations.
On the other hand, Japan is yet to completely stop the radiation leak from its damaged nuclear reactor. The markets have appreciated significantly over the last few weeks and most of the positive factors are already been factored in the valuations. Investors should exercise caution and fresh investment decisions should be taken only after careful study of the results and management guidance.
These are some of the major developments of the previous week that are expected to drive the sentiments and market direction in the short to medium terms:
US economy improving
The US economy shows signs of a slow but consistent improvement. The creation of new jobs, which was a concern since the last few quarters, has also improved during the last few weeks. The early bird results of the first quarter of large US companies have been quite good so far, and have created positive sentiments in the markets.
Investors should track the first quarter results of large US companies. The results season in the US will influence the market sentiments across the globe.
IIP data
The growth in the Index of Industrial Production (IIP) for February fell to 3.6 per cent from 3.9 per cent in January. Lower growth in mining, power and consumer goods led to this drop in the IIP number. Investors should not read too much into the IIP numbers, as they look subdued due to the higher base effect of last year.
However, investors should certainly feel concerned about the lower IIP growth to some extent. The series of interest rate hikes by the Reserve Bank of India (RBI) have certainly played a role in denting the industrial growth and have resulted in the lower IIP number. Analysts believe a further rise in interest rates from the current levels will dent the growth in the manufacturing sector some more and that is not a good sign for a growing economy.
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