Weekly Market Outlook - Teena Virmani, Vice President, PCG Research at Kotak Securities

Teena Virmani, Vice President, PCG Research at Kotak Securities for your reference.

Markets witnessed gains during the week, led by positive news on monsoon expectations coupled with mixed set of corporate results and increase in domestic liquidity. Most of the manufacturing companies' results indicated that impact of demonetization has almost faded away. Global indices added some volatility owing to tensions between the US and North Korea while positive sentiment was added by the victory for centrist and pro-EU candidate, Emmanuel Macron, in Sunday's French election.

In the coming week, market movement will largely be dependent on corporate results, IIP and inflation data as well as further updates on monsoon. There will be a new series of IIP and WPI to help in more accurate mapping of economic activity. Globally, escalating tension between the US and North Korea, tax reform measures from US President as well as oil prices will be important events to watch out for.

Markets are currently trading at fair valuations and hence sustainability of earnings going forward is very important at current levels. Any disappointment on the earnings front and the outlook could result in profit booking. Investors could look at companies with good management quality, strong balance sheet and reasonable valuations.

Source : Equity Bulls

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