Indian Markets Outlook for the week – 11 to 15.05.2015
Stock
indices will take direction from developments in Parliament over key bills,
domestic
economic data and corporate earnings next week. Although equities rebounded
yesterday, we cannot get carried away with the recovery just yet as the gains
have to besustained, which depends on factors such as progress of the Goods and
Services Tax bill and the Land Acquisition bill, movement in crude oil prices,
rupee and quarterly results. The Budget session of the Lok Sabha and the Rajya Sabha
will conclude on May 13.
The
indices ended up nearly 2% following formation of a panel by the government to
resolve
Minimum Alternate Tax on foreign institutional investors’ issue. Appreciation
of
the
rupee, fall in crude oil prices and stabilisation of government bond prices
globally
also
aided gains.
Government's
move to set up a high level committee to decide MAT issue could reduce
FII's
concerns over the medium term. But the risks prevailing with Q4 (Jan-Mar
earnings)
and
outcome of key bills still remain. That the downtrend is not over yet is
corroborated by the fact that foreign institutional investors remained net
sellers even yesterday. On Monday, stock indices will take cues from global
markets' reaction to the US non-farm payrolls data for April.
On Tuesday, the Central Statistics Office will release Consumer
Price Index based
inflation data for April and Index of Industrial Production data
for March.
Greece
will also be in focus on Tuesday as the country has to pay back around 750 mln
euros
of principal to the International Monetary Fund. On the earnings front, Dr
Reddy's
Laboratories,
Lupin and Bank of Baroda are the Nifty companies detailing Jan-Mar
earnings
next week. We are positive on private bank, information technology and fast moving
consumer goods shares next week while PSU banks are likely to extend losses.
