Markets may see shaky start, say experts

But expect them to bounce back later in the week

Indian equities may see sluggish trading sentiment early this week following data that India’s Current Account Deficit (CAD) touched a record high of 6.7 per cent in the October-December quarter, but the markets are expected to bounce back in view of the recent downtrend.

Analysts said the sentiment is likely to be subdued as investors may react to the CAD data that was made public by RBI in its report on Balance of Payments - released after market hours on Thursday, followed by long weekend because of Good Friday holiday.

The CAD, which is the difference between inflow and outflow of foreign exchange, widened from 5.4 per cent in Q2 (July-September) to a record high of 6.7 per cent of the GDP in Q3 of 2012-13 fiscal, driven mainly by large trade deficit.

However, some analysts said that the recent downtrend in the market may prompt some value buying and push it up after the initial reaction to CAD, if any.

“The recent sharp fall in the market suggests that much of the negativity may be discounted and it can see a bounce back,” Milan Bavishi-Head Research,Inventure Growth and Securities.

The BSE 30-stock index, Sensex, has lost over 2 per cent in the last 15 trading sessions.

Auto and cement stocks will be in focus as companies from these two sectors unveil monthly sales data for March from Monday. Besides, HSBC India manufacturing PMI for March will also be announced on Monday, while the performance of services sector will come out on Wednesday.

According to Rakesh Goel, Senior Vice President, Bonanza Portfolio: “This week, 5,700 shall be crucial deciding level for Nifty in near-term and the index is likely to witness further buying above this level.”

Stock specific action will be seen in IndusInd Bank, NMDC, Siemens and Wipro. IndusInd Bank and NMDC will be part of the Nifty index with effect from Monday, replacing Siemens and Wipro.

Stock markets closed the fiscal 2012-13 on a positive note, coming off four-month lows and with the BSE benchmark Sensex rising by 0.53 per cent last week.