FII inflows to dictate trend

The market may remain range-bound next week, as traders may not take fresh positions due to an abridged week that lies ahead. The market will enjoy holidays on Tuesday and Wednesday.

FII inflow has picked up in April 2007 in the backdrop of strong global liquidity. Stock-specific activity will continue in the near-term, as a number of companies are yet to announce their Q4 March 2007 results.

FIIs have pumped money heavily into Indian stocks, this month. Their buying picked up after IT major Infosys on 13 April 2007, issued a strong guidance for FY 2008, putting to rest concerns of a US economic slowdown on the IT sector. FII inflow for April 2007 (till 26 April) reached Rs 6874 crore. FIIs had pulled out a net Rs 1082 crore in March 2007.

The major Q4 results scheduled next week are Reliance Communications (RCL) and Hindustan Lever on Monday, i-flex Solutions on Tuesday, HDFC on Thursday, and Hindalco on Friday.

The outcome of the ongoing seven-phased Uttar Pradesh assembly elections is a key political event to watch out for. The assembly poll gets over in early-May 2007, and the vote is seen as a barometer of national political trends. With global oil price surging in recent weeks, there are talks that the government may hike retail prices of petrol and diesel once the UP elections are over.

Although the Reserve Bank of India (RBI) has kept rates steady, market men feel that the pause may just be a temporary measure. Inflation remains high at around 6%.