Market Ahead - High Volatility Expected in Market this week... - Equentis Capital

Volatility may increase on the bourses in a truncated week as F&O traders will roll over positions in the F&O segment from April 2013 series to May 2013 series. The May 2013 F&O contracts expire on 25 April 2013. Market will be closed on Wednesday, 24 April 2013 on account of Mahavir Jayanti.

The market is entered in the crucial period of corporate earnings. Investors will closely watch the post - Q4 results and management commentary to gauge the future earnings outlook at the time when firms are witnessing higher cost pressures amid slower economy growth and higher staff cost.

Initial forecast of southwest monsoon will be issued by Indian Meteorological Department in this month. Rainfall forecast will be considered crucial as sowing of a number of crops starts in June and good rains determine the soil moisture and ensure proper development of the crops will be planted in June. WPI inflation is ease to 5.96% in March 2013 from 6.84% in February 2013. Positive inflation data may help market to move up in short term.

SGX Nifty future indicates that the Nifty could gain 33 points at the opening bell. Asian Benchmarks are trading higher on 22 April 2013. US Indices ended on flat to positive note up by 0.07 to 1.25% on 19 April 2013. Europe markets closed on upward note on 19 April 2013 indicates positive opening for Indian benchmarks. Nifty may find resistance at 5884 - 5986 - 6178 and supports at 5590 - 5398 - 5296 and BSE Sensex may find resistance at 19335 - 19654 - 20250 and supports at 18420 - 17825 - 17506 for the week.

Current pull back should be taken as technical bounce in the market. This rally may complete entire pull back between 5780 - 5850 according to NIFTY spot level. We are mentioning that because current activity in the market place leaded by large market player and short positions are still open in the market, unwinding of short position may support this pull back till 5850.

Though fund flows are still not enough to set the near-term trend, Lower volume and a smaller amount of retail participation is bothersome factor for market. Falling international Commodity (GOLD, SILVER) and Crude prices and positive domestic data flows (lower WPI Inflation data and hopes of RBI's key interest rate cut) supporting upward move at some extend.

For the betterment of the economy in long run government may focus on key bills consideration and passing during the Budget session of the parliament. The second half of the Budget session of the Parliament begins on 22 April 2013 (Today) and session ends on 10 May 2013, some of important bills which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008.

Government disinvestment plans for FY2013 - 2014 and Reduction of promoter stake to meet the SEBI mandated minimum public shareholding of 25% for private companies and 10% for state-run firm will result Supply of equity in the market over the next few months.

As per the SEBI mandated minimum public shareholding rule, private-sector companies must cut promoters stake to adhere to the rules by 30 June 2013, while the deadline for state-run firms is 31 August 2013.

Buying of FII's for last three months may become major concern for market movement. FII's if starts aggressive selling at this level could become stress for the market. FIIs Bought shares worth a net Rs 9400.7 mn and DIIs Sold shares worth a net Rs 4052.2 mn on 18 April 2013, as per provisional data from the NSE and BSE.

Crude OIL is accounted 80% of our total import, in NYMEX future trading up by 0.52 percent at $88.50 a barrel now. On global front recently released important data from China, US and Europe indicate slower economic recovery then expected.

Source : Equity Bulls

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