Wealth Monitor: Markets may move in a narrow range

The equity markets were in a narrow range of about 100 points last week. The market benchmark, S&P CNX Nifty, closed at 5485, with a marginal loss of 0.56% for the week. Investors stayed with small and mid-cap stocks. The BSE Small-cap index rose by 0.6%, while the BSE Mid-cap rose by 0.03% week on week. The BSE Consumer Durable index was the best-performing sectoral index with a 3.16% gain. As inflation moved up, fears of another interest rate rise affected the auto sector. The BSE Auto index lost 1.97% and was the worstperforming sectoral index.

"Markets are in a wait-andwatch mode, waiting for some cues. In the short-term, they are expected to move in a narrow range. The immediate resistance for Nifty is 5600 and the support is at 5380-5400," says Anand Kuchelan , vice-president - research, Padmakshi Financial Services.

The market will wait for various data inputs. On June 14, the inflation numbers will be out. On June 15, corporate India will be paying the first instalment of advance tax. Analysts will closely watch the advance tax numbers. The RBI will review the monetary policy on June 16. Interest rate-sensitive sectors are expected to remain under pressure in the high interest rate regime. IT companies have been doing well on the bourses for some time, but the trend may reverse, if the economic scene undergoes a drastic change due to the sovereign crisis in Europe.

FIXED INCOME: Rising interest rates on the back of rising inflation remain a key concern for the fixed income market. "We expect the Reserve Bank of India to increaser the key rates by 25 basis points during the monetary policy review," says Mahendra Kumar Jajoo, ED & CIO, fixed income, Pramerica Mutual Fund. The 10-year benchmark yield is expected to remain in a narrow range in the near term. The short-term bond funds may benefit from the attractive shortterm interest rates.

GOLD: Gold remained firm in the Indian market and posted marginal gains. The end of the Federal Reserve's monetary easing policy and a seasonal slowdown is expected to further weaken gold's prices in the international market in the near-term. Any weakness is to be seen as a buying opportunity as gold is expected to shine since the Eurozone sovereign crisis may come back to haunt investors worldwide.

Source: http://economictimes.indiatimes.com/markets/analysis/wealth-monitor-markets-may-move-in-a-narrow-range/articleshow/8830840.cms