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Below Perspective on markets by Mr. S Hariharan, Head Institutional Equity Sales, Emkay Global Financial Services

“The month of January has seen very tepid market volumes – daily cash market volumes of Rs 47,000 crores, compared to Rs 56,000 crores in Oct-Dec quarter. This is despite strong institutional participation, which is up to an average of 27% of daily market volumes compared to 22% in Oct-Dec quarter. This points to lackluster sentiment from domestic retail participants, and this is also reflected in futures segment. January rollover spreads for futures positions have been cheaper than the last 3 months, reflecting relative reluctance from long positions to roll positions.

On the other hand, the results season has seen a meaningful positive surprise factor from both IT, Banking as well as Auto sectors to the extent that earnings have been reported. We expect consumer discretionary names to stay under pressure due to weak demand in entry level categories and rising base metals prices would also act as a margin headwind going ahead. Foreign flows have been relatively weak, as relative valuation attraction in China has drawn incremental flows, but this phenomenon is expected to be overcome by strong growth numbers that Indian corporates continue to report.”

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