Soft start, firmness ahead

Challenges are gifts that force us to search for a new center of gravity. Don't fight them. Just find a different way to stand. - Oprah Winfrey.

After the long Easter weekend, world markets will try to remain resurrected despite a series of headwinds. As has been the case lately, earnings will continue to dominate the headlines for a few more days. Talking of India, the disappointment from index bellwether Reliance could put a lid on gains at least in the early trade. The start could be subdued but we could see some positive action later in the day.



Overall, the undertone should remains upbeat as equities across the globe have been resilient in the face of sovereign debt concerns, MENA tension and inflation worries. For India, the good thing is FIIs continue to be net buyers. Although results have been mixed, YoY growth in profits and sales is robust. Inflation remains a major pressure point, resulting in expectations of further rate hikes.

The trend may turn slightly choppy ahead of the F&O expiry on Thursday. The Nifty may face resistance around 5900 while a major support is likely at 5700 in case of a fresh downside. The Nifty might touch 5935 in the near term if the momentum sustains. It could even breach 6000 in the coming days, provided overseas markets are supportive and foreign funds remain net buyers. Bearish implication prevails only if the Nifty falls below 5800.

Banks could gain on reports that the RBI has eased norms for loan loss provisions. Axis Bank is likely to be in action after its results. Subex and JB Chemicals will be in the spotlight amid M&A buzz.

Shares of Unitech, DB Realty and ADAG companies will be in focus as the Delhi High Court takes up the bail applications of the five officials named by the CBI in the 2G spectrum scam on Tuesday. Reports suggest that the CBI is expected to name a few more people, including DMK Rajya Sabha member Kanimozhi, in its new chargesheet today.

Results Today: Alstom Projects, Atlas Copco, BILT, BOC India, Geometric, Gillette India, Indiabulls Power, Indiabulls Securities, KPIT Cummins, Mahindra Holidays, M&M Financial, Maruti Suzuki India, Merck, P&G Hygiene & Healthcare, Sesa Goa and Sterlite Industries.

FIIs were net buyers of Rs 3.07bn in the cash segment on Thursday (April 21), according to the provisional NSE data. The domestic institutional institutions (DIIs) were net sellers at Rs 2.69bn on the same day. In the F&O segment, the foreign funds were net buyers at Rs 8.48bn. The foreign funds were net buyers of Rs 4.62bn on Wednesday (April 20), as per the SEBI data. Mutual funds were net sellers at Rs 36mn on the same day.

US stocks ended higher for the third straight session on Thursday, pushing the Dow Jones Industrial Average to a multiyear high. European stocks advanced as well on strong earnings. Most Asian markets are up although Chinese stocks are in the red amid conjecture of fresh tightening moves by the policymakers.

Meanwhile, the Fed will hold a two-day policy meeting ending on Wednesday. Ben Bernanke will hold a news conference. First-quarter US GDP data is due on Thursday. The week ahead includes reports from nine Dow components and 180 S&P 500 companies. Earnings will continue to pour in from other parts of the world as well.