Market Outlook for April 21,2014 …

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The WPI inflation surged to a 3 month high @ 5.7% on the back of rising food prices which led to a recent correction in the markets especially in the banking space as hope for a rate cut from RBI diminishes.

The week started on a weak note and stayed weak for the first two days as investors continue to book profit, however on the last trading day of the truncated week, the indices bounced back sharply and closed near their highs made in last week. Banking and Cyclical stock regained their lost ground while certain IT and FMCG stocks were a bit of a drag on the markets.

IT majors Infy, TCS and HCL tech announced their results and were in line with street estimates except for HCL Tech which beat the street estimates.

Next week will be highly volatile as we enter the expiry and also biggies like RIL, HDFC Bank Axis Bank, ICICI Bank etc and many other midcap companies will be coming out with their earnings. As the days are passing, probability of simple majority to NDA are increasing which is the key focus area and markets are taking cues from the opinion polls and higher voter turnaround the country is witnessing.

Going forward markets will be majorly focusing on the exit poll opinions and the earnings cycle which is likely to decide the direction of the market. We recommend investors to stick with companies which will post strong earnings and good quality mid cap stocks which will turnaround as the capex cycle and macro environment improves.

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