Benchmark indices are likely to be volatile and move up about one per cent this week.
First quarter GDP data of current fiscal, derivatives expiry, auto and cement numbers are expected to influence the quantum of index movements.
Movement in auto and cement stocks are the ones to watch out for.
Marketmen are already factoring in the possibility of disappointing first quarter GDP numbers. Though the GDP growth rate is expected at 5.4 per cent, a sub-five per cent number cannot be entirely ruled out.
US firm JP Morgan said: “The first volley of reforms was expected after the presidential poll in late July. But that has not been the case. The monsoon session has been stalled following the CAG report on coal block allocations. Coalition allies continue to be reluctant on key reforms,” the report said adding, “Bulls are now getting edgy.”
Rainfall deficiency this year could end up lesser than expectations with monsoon progressing well throughout the country of late.
This could put lesser strain on the Government’s social sector spending had a drought-like situation persisted.
The 10-year benchmark G-sec yield is expected to be between 8.15 per cent and 8.25 per cent levels.
The rupee dollar exchange rate would be influenced by month–end payments by oil importers on one hand and FIIs flows on the other. In sum, the rupee could end up appreciating and breach $54.75 levels to a dollar.
Globally, the statements of Ben Bernanke and IMF’s Christine Lagarde at the Jackson Hole economic policy symposium assume significance.
There has been an increasing tendency among policymakers to issue positive statements and keep market-men happy.
Yield on 10-year US treasury is likely to remain range bound and between 1.60 and 1.80 per cent levels.
It remains to be seen whether the Euro Zone gives Greece more time to implement austerity measures.
The Euro is expected to strengthen against the dollar and move towards $1.2650.
Nymex crude futures are likely to be range bound and within two dollars on either side of last week’s close of $96.15 to a barrel.
Gold is expected to remain flat with a positive bias and could gain about a per cent and to touch $1,690 levels to an ounce.
Finally, the dollar index could shed about a per cent from last week’s close of 81.593.