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Benchmark indices are seen trading with a negative bias in the week ahead with the decline in the rupee against the greenback denting investor sentiment, yesterday, rupee was at an over 11-month low against the dollar because of weak macroeconomic fundamentals and several global factors, including the gradual strengthening of the dollar globally. So far in this month alone, the rupee has depreciated over 4% against the US currency. A weak rupee erodes the value of foreign institutional investors' holdings. The National Stock Exchange's 50-share Nifty's closing below the psychological level of 6000 will also weigh on the market. In the week ahead, we expect that a close below 5970 can see further selling pressure on the Nifty until the 5850-5900 level. Thereafter there is a possibility to test the 5750-level in the medium term (a month). In the week ahead, most sectors are seen trading with a negative bias. Bank stocks, especially those of public sector banks, are seen weak following the Reserve Bank of India's tightening of rules for recasting loans by hiking the provisioning norms and increasing the minimum amount of promoter sacrifices in such cases. Also, diminished hopes of a rate cut from the central bank after RBI Governor D. Subbarao's hawkish commentary on inflation and current account deficit is likely to weigh on bank stocks. Weakness in the rupee may act as a positive trigger for information technology and pharmaceutical companies' stocks. Cement and automobiles companies, which will start outlining their May sales numbers, too, are seen weak. Stocks of companies including Apollo Hospitals, GlaxoSmithKline Consumer Healthcare, Oil India and Wockhardt will be a part of the MSCI India Index from close of trading hours yesterday. Most of the companies to be included in the index are seen trading in a small range with the exception of Wockhardt and Apollo Hospitals, which may see an upside.With the result season almost over and lack of triggers for the market in general, global cues will act as important indicators for the market. Dow futures were trading 76 points lower, suggesting a negative start to yesterday's session on Wall Street, as investors awaited data on consumer confidence and business activity for May. Several market players believe the probability of Indian equity indices bouncing back on Monday will depend on how the US stock market reacts to its data points.
