Market could be choppy ahead of derivatives expiry

The market is likely to be choppy next week ahead of the expiry on the near-month June 2011 derivatives contracts on Thursday, 30 June 2011. Shares of auto, steel and cement firms will be in focus ahead of monthly sales numbers for June 2011, which will start trickling in from Friday, 1 July 2011. On the macro front, investors will watch the HSBC India Purchasing Managers' Index (PMI), which indicates the performance of the manufacturing sector, for June 2011.

Expectations for Q1 June 2011 results will start building as the first quarter draws towards a close. Housing finance major HDFC kicks off the results season on 8 July 2011. IT bellwether Infosys Technologies will unveil Q1 results on 12 July 2011.

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FII outflow in June 2011 totaled Rs 512.10 crore (till 22 June 2011). FIIs had offloaded shares worth a net Rs 6614.40 crore in May 2011. FII outflow in calendar 2011 totaled Rs 2413.90 crore (till 22 June 2011).

Investors will continue to watch the progress of the monsoon rains. The India Meteorological Department (IMD) recently revised downwards the forecast for the vital monsoon rains this year to slightly below normal from the normal forecast given in April 2011. On the flip side, crop output may not be adversely affected significantly due to the onset of the monsoon rains on time this year and expectations that the rains will be well distributed.

On the global front, the Greek government faces votes next week on the austerity measures and putting it into law before a deadline in mid-July to secure a new bailout from the European Union and IMF.

Greek Prime Minister George Papandreou has reportedly assured European Union (EU) leaders that he would deliver the budget cuts they are demanding in exchange for the next installment of emergency loans and a new rescue plan. The approval of the five-year austerity plan, including deep spending cuts and more tax hikes, by the parliament would bring Greece one step closer to securing the much-needed financial aid.