www.rupeedesk.in
Key stock indices are expected to trade in a narrow range next week, with overseas markets and Jan-Mar earnings from companies likely to offer further cues on direction. The bias is likely to remain negative as the National Stock Exchange's 50-share Nifty closed below the psychological 5600-mark for the second straight session yesterday. Selling from exchange-traded funds has weighed heavily on the market in the past three sessions, including yesterday, and will keep investors nervous. Later in the week, investor attention will shift to India's industrial production data for February and Jan-Mar earnings of companies. The IIP data will be detailed on Friday as will quarterly numbers from information technology major Infosys. Development Credit Bank will also announce its Jan-Mar results the same day. Most market participants are betting on 5500 holding as a key support for the Nifty, whereas on the upside, sustaining above 5600 is seen crucial for further gains. On Monday, cues will initially be taken from overseas markets. Investors will particularly eye US non-farm payrolls data for March, due later yesterday. Among stocks, Bharti Airtel will be in focus on Monday as the Supreme Court will hear its plea challenging the telecom department's Mar 15 order that asked the company to stop providing 3G services through intra-circle roaming pacts in seven circles where it did not have 3G licences. The department had also imposed a 3.5-bln-rupee penalty on the company. Stocks of sugar producers may extend gains after the government partially decontrolled the sector, but profit booking is not ruled out. Most believe that Bank of Japan's aggressive monetary easing policy stand will help lower raw material and royalty cost for the company. We have revised our US$/JPY currency assumption upwards to 90 for both FY14E, FY15E from 85, 86 earlier, respectively. Margin improvement (for Maruti Suzuki) will likely be aided by operational levers of volume growth as new launches kick-in H2FY14E (Oct-Mar) and on favourable currency.
