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Global investor sentiments will determine market trend

The Indian stockmarket build on its previous week’s gains with the Nifty gaining another 2%. Government launching the smart cities, housing for all and urban rejuvenation schemes aided the banking sector outperformance with the Bank Nifty surging by 2.8%. The CNX Realty index also gained 5.8% for similar reasons. Global IT giant, Accenture, raising its full year growth forecast helped the CNX IT index notch a 1% gain.

A sub-par monsoon projected by the IMD had contributed to overshadowing investor sentiments last month and in the first half of the current month. However, a good start to the monsoon and a better progress so far has helped allayed investors’ fears pertaining to no possibility of a rate cut. Notably, not only has the monsoon covered the entire country, but it has done so two weeks ahead of schedule despite a delayed start. Continued value buying by medium-to-long-term investors at lower levels also contributed its bit. Moreover, with China’s stockmarket continuing its slide, with the index down ~19% in 2-weeks, it has seemingly given some breathing space to Indian equities, as FIIs were net buyers to the tune of about Rs700cr.

Going forward, apart from monsoon, all eyes will be on how the Greece bailout plan unfolds during the weekend or the early part of next week, as this will have a short-term bearing on global investor sentiments. Apart from this, auto monthly sales numbers would be released next week, which will keep the sector in focus. However, with earnings season round the corner once again, market participants may like to adopt a wait-and-watch approach considering the disappointing performance delivered by India Inc. for 4QFY15.

Hitesh Agrawal, head research, Reliance Securities

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