>KARVY BAZAAR BAATEIN

Swine Flu impact: A minor blip…

After seven consecutive weeks of spectacular gains, markets witnessed a marginal hiccup last week when the world woke up to the outbreak of “Swine Flu”. As the Flu spread to the rest of the world, global markets dipped sharply on Tuesday, particularly the travel, tourism and airline stocks. However, in what was a curtailed trading week, markets rallied spectacularly on Wednesday, closing the week on a fl at note. While the Nifty closed with a marginal dip of -0.20% W/W, the BSE Sensex rose 0.65%, recording its eighth consecutive week of gains.

The Flu impact was merely a blip on the bourses, and the positive bias in the markets is clearly evident from the encouraging news fl ow emanating from India and the US. In regard to the quarterly results, major heavyweights did not disappoint the markets, and the results continued to be fairly in line with expectations. In the banking space, particularly, select banking stocks declared better-than-expected results, although ICICI Bank failed to beat market expectations. However, with its NPA levels coming in lower than expectations, the stock witnessed a spectacular rally. Globally, too, US companies have been declaring better-than-expected results, raising hopes of a soft landing for the global economy, particularly in the backdrop of rising consumer confi dence data from around the world.

While the positives are increasingly seeping in, one must not forget that the major economies iN the world are still showing negative growth. The US’ Q1 GDP shrank 6.1%, which was worse than economists’ estimates. However, a global recovery can only be pronounced if the positive new fl ow continues to be sustainable.

In India, the focus has shifted from WPI and GDP growth to the ongoing Lok Sabha elections. Clearly, no elections have grabbed the nation’s attention as this one has. With the verdict expected to be the most fractured in India’s political history, markets may witness increased volatility in May. From a global perspective, the outcome of the stress test results on banking stocks in the US is likely to influence the direction of the global equity market in the coming sessions. Stocks in energy, software, BFSI and capital goods are expected to trade on a positive note during the week.

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