Are we near the crossroads?-ithought’s market wrap

Quick edit:

The country’s bellwether stock announced a share buyback. By doing so, the company signalled to the stock markets that their stock was undervalued. In a parallel move, it has announced disappointing quarterly results. Such mixed signals only tend to create polarized opinions on the actual intent of the buy back. Clearly, the buyback price needs to be attractive enough to save the day for the company’s stock.

The coming week will possibly see increased volatility and the markets must look out for more announcements from the company. With the company trying to shore up sentiment in its stock through a buy back, the stock will possibly trade in a range. That sets the stage for the market leadership to move beyond Reliance. After all, the stock market strongly believes that growth is life.

Impact:

The rise of the Rupee was the story of the week. This was largely facilitated by investment inflows into debt and equity. FII’s turned buyers of Indian equities and this clearly surprised the market which saw the nifty cross 5000 and trade above it at the close of the week. Domestic funds sold through the week as company results mostly met expectations.
The coming week will see greater volatility as the futures settlement draws to a close. The results season will pick up momentum and expectations are running low. That sets the stage for liquidity to drive market direction. FII behavior holds the key to the indices.

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