US Fed, Ukraine tensions to determine market movement next week

Business

oi-Sunil

By Sunil Fernandes

Published: Saturday, March 15, 2014, 10:36 [IST]

Markets ended the week marginally lower by 110 points, compared to the last week. Interestingly, the week also saw the Sensex hitting a record high of 22,024 points as inflation eased and further opinion polls suggested that the NDA was getting closer to the half way mark.

The week saw shares of Infosys falling dramatically by 8.5 per cent on Thursday after the management revised its revenue guidance downward and painted a less than rosy picture going forward.

Sun Pharma also fell after a US import alert for one of its plants. L&T was the star performer this week jumping 5 per cent on receiving substantial orders from the Middle East.

Going forward there are two major events next week. If tensions in Ukraine escalate and there is a military conformation between Ukraine and Russia, markets could fall. Also, all eyes would be on the likely sanctions on Russia and how it retaliates. As we write talks between John Kerry, US Secretary of State and Russian Foreign Minister Sergei Lavrov in London have failed to find common ground on Crimea.

On the other hand we also have the US Fed meeting slated for Tuesday, in which a further QE3 tapering decision is likely to be announced. If the amount is more than $10 billion, we could see markets react sharply.

Clearly, markets are going to be volatile in the next week. As is the case it's always difficult to predict the direction.

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