ICICI Direct: Weekly Equity Pulse

Previous week

The market maintained its strength in the previous week also. Both indices showed a somewhat mixed trend on a closing basis for the week. On one hand while, the Nifty ended the week with a marginal loss, the Sensex continued to rally and completed its eighth week of gain in a row. It was a three-trading-day-week only. Volatility remained very high due to the monthly derivatives expiry on Wednesday, the last trading day of the week. The market on the very first day of the week rose sharply during the early trading session however, shrugged off most of the gains till the close. On the next day, continuing the negative undertone, the market fell sharply, weighed down by the fear of swine flu pandemic that put pressure on the global markets too.

Week Ahead

Some sign of nervousness was seen in the market during the previous week, when it fell sharply one day, however, the recovery on the very next day indicated that the rally still has the power to continue further. Next week it would be interesting to watch how long this rally can go on, as we would be nearing the completion of the general election. Also, the market globally would be waiting to see the results of the US banks` stress test data that is likely to come on the very first day of the week. This would be very important as far as the near-term market direction is concerned. The Q1 US GDP advance estimate that was due on April 29th also would be important for the Indian market, as the effect of that will only be seen in the coming week. Overall, the market is likely to see high volatility in the coming week also. Continuous fund flow into the Indian market on the other hand is expected to maintain the positive undertone for the market.

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