Markets Set To Rally Next Week

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Benchmark indices are set to rally next week, as global cues were strong on Thursday and Friday, even as Indian markets were closed.

Markets Set To Rally Next Week
The deadline for Long Term Capital Gains tax to kick-in is now over and hence selling pressure is likely to end, which could fuel a nice rally across the Indian markets. Apart from this, mutual funds would be flush with funds from huge deluge of money into Unit Linked Insurance Plans and Equity Linked Saving Schemes.

They are hence likely to deploy the money, given that the indices are down a good 9 per cent from peak levels.

However, beyond the month of April, domestic funds would need to sustain the rally. One is not sure on the more medium and long term, how prices would move. In the month of May there might be a rejig of the MSCI Asia Pacific index.

The MSCI Asia Pacific Index captures large and mid cap representation across 5 Developed Markets countries and 9 Emerging Markets countries in the Asia Pacific region.

If the representation of Indian companies is reduced it may lead to a sell-off in the Indian markets.

The MSCI had warned Indian exchanges, that a move by them to stop all licensing deals with their foreign counterparts is anti-competitive and could jeopardize the country's standing in indexes tracked by global funds worth trillions of dollars.

A key event would be the Monetary Policy Committee meet of the RBI on April 4 and April 5. It is widely expected that the RBI would hold interest rates steady. However, the tone of the RBI in this context would be important. A more hawkish tone would do nothing to improve sentiments of the market.

Corporate results would also kick-in in the month of April. Analysts would eagerly watch the results of tech majors and the banking sector for any momentum.

A worry for the markets is rising crude prices. A further surge in the month of April would not be good for the markets. Overall, expect a slightly positive bias in the coming week.

Read more about: sensex, nifty
Story first published: Saturday, March 31, 2018, 7:46 [IST]
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