Mkts to remain choppy in holiday-truncated week

FII flows and crude oil price trend to be in focus

The markets are likely to track foreign fund inflows and trends in oil prices in the holiday-shortened week ahead.  In the week ended March 18, benchmark shares indices gained for a third straight week, buoyed by encouraging macroeconomic data. The US Federal Reserve’s dovish stance also raised hopes of a rate cut by the Reserve Bank of India (RBI) and also provided comfort on further foreign fund inflows.

The Sensex gained 235 points to end at 24,953 and the National Stock Exchange’s Nifty gained 94 points to settle at 7,604. “We believe RBI is now in a much better position to consider cutting interest rates further after the US Fed kept interest rates unchanged in its last FOMC (Federal Open Market Committee) meet. The Fed also reduced its forecast regarding the number of interest rate cuts this year, which we expect would abate a lot of pressure from the Indian rupee. This is further supported by a fall in CPI (consumer price index), which dropped to 5.2 per cent in February after five straight months of rising. The markets would also be keenly watching the FII (foreign institutional investor) flows over the near future, which would also be a critical indicator of institutional investor mood. We expect the markets to remain weak for the coming sessions and remain in the range of 6,900-7,600 Nifty over the medium term,” said Achin Goel, head of wealth management & financial planning, Bonanza Portfolio.

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• Markets consolidate ahead of key eco data, US Fed meet

The US Fed at its two-day policy maintained a status-quo on key rates and indicated there could be just two rate hikes instead of four as was widely expected by the market.

FIIs and foreign portfolio investors have pumped in Rs 12,873 crore ($1.90 billion) till March 17. According to provisional stock exchange data, they bought an additional net of Rs 1,713 crore equities on Friday.

Stocks

GAIL ended seven per cent higher after the Petroleum and Natural Gas Regulatory Board revised the tariff of its KG-basin network pipeline to Rs 45.3 per million British thermal unit or mBtu, significantly higher than the current provisional tariff of Rs 5.6 per mBtu. According to analysts, tariff revision for the KG basin network is a precursor of a material change in fortunes for GAIL over FY17-18.

ONGC gained nearly five per cent after its overseas arm ONGC Videsh signed a memorandum of understanding with Rosneft to acquire an additional 11 per cent stake in Vankorneft for $930 million.

ICICI Bank ended seven per cent higher after global rating agency Moody’s in a report maintained its ratings as well as positive outlook on ICICI Bank and its financial instruments.

The week ahead

The markets are likely to remain choppy in the holiday-truncated week ahead as investors would track foreign fund inflows and trends in global crude oil prices.

The markets will remain closed on March 24 on account of Holi and on March 25 on account of Good Friday.