Market movement to be led by global cues, volatility to persist

After a good previous weeks, stock markets failed to build on the momentum as indices erased all its gains to close almost unchanged. The possibility of four rate hikes this year in the US, rising crude oil prices and rising bond yields were among the major concerns that dragged the markets lower once again.

Even promising quarterly GDP numbers failed to cheer the sentiment on the street.The pace of economic growth in India is pretty much in line with expectations as captured by the latest GDP estimates. Indian economy extended the recovery during Q3, with GDP growing at 7.2% year-on-year (Y-o-Y), compared with 6.5% a quarter prior.Estimates project FY18 GDP will expand by 6.6%. While, core infrastructure sectors during January grew at a faster clip at 6.7% (Y-o-Y). India's fiscal deficit on the other hand, stood at Rs 6.77 lakh crore at the end of January, much above the target for the entire fiscal.

The previous week was a short week as markets were shut on Friday on account of Holi festival. The Sensex ended 137 points down or 0.40% at 34046.94, while the Nifty was down 34.50 points or 0.33% at 10458.40. The market breadth favoured the declines as 1163 shares advanced, against a decline of 1532 shares, while 207 shares were unchanged.In terms of stock movements, Coal India, IndusInd Bank, BPCL and AurobindoPharma were the top gainers among all indices, while ICICI Bank and SBI were the top losers.

Experts believe that volatility in Indian markets may continue for some more time due to both global events and domestic factors. The results of state elections in Tripura, Meghalaya and Nagaland with BJP set to come to power in Nagaland and Tripura should aid positive sentiment.

The automobile sector is expected to be in focus next week as the companies release sales figures for February 2018. Among other sectors, a rise in prices of steel post the release of strong economic data in China boosted buying in shares of metal companies.

As long as the market consolidates without such a breakdown, chances of a breakout will remain higher with a target of 10,900 levels. So how is the coming week expected to pan out for investors? Going by theweekly charts markets appears to be in a consolidation mode in the larger zone of 10630 – 10300 levels.

As long as the market consolidates without such a breakdown, chances of a breakout will remain higher with a target of 10,900 levels.

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