Markets lost momentum to close on a weak note during the week ended due to the absence of any stimulus proposal from Bank of Japan and turbulence in the parliament over the Augusta helicopter deal. The Sensex and the Nifty closed 231 points and 49 points lower at 25,607 and 7,850 respectively. However, heightened interest was seen in midcap counters signaling retail investor interest.
Despite fears that the Augusta deal imbroglio will disrupt parliament proceedings, optimists expect some key financial agenda to be cleared by the parliament in next few days.
With no major negative surprises in the earnings season, the progress of monsoon will be very closely watched for market trends in the short to medium term. Apart from monsoon, investment pattern of institutional investors, movement of the rupee against the dollar and international crude oil prices will dictate the near-term trend of domestic markets.
It is pertinent to observe that US markets have suffered their deepest weekly decline since early February during the week ended. The turbulence on the Wall Street has been attributed to Japan’s central bank steps and sharp appreciation of yen against the US dollar.
For the week ahead, chartists predict a trading range of 25,000-26,300 and 7,655-8,050 for the indices. Key supports for the indices are at 25,325 and 25,000 and 7,765 and 7,675.
“The whole secret to winning and losing in the stock market is to lose the least amount possible when you are not right.” Market observers advise long-term investors to ignore short-term gyrations in the stock market and not get caught up in the earnings volatility.
