Market view for the week 21-25 March 2016:
Indian equity market is cheering with neutral to positive trend. FIIs have cleared their intentions. Volatility is likely to continue for some more time as the market awaits a bigger trigger events which could come in the form of earnings growth. Firstly the implementation of the Seventh Pay Commission, a good monsoon and mega event, rate cuts by the central bank would also improve the sentiment of the market participants. Meanwhile, domestic institutional investors (DIIs) have booked profit more than `6, 500 crore from Indian equities over the last 11 sessions while FIIs have pumped in `11,933 crore in past 11 trading sessions post Budget. On the flip side, DIIs were net buyers of Indian shares to the tune of `23,366.61 crore over January and February, while FIIs dumped a net of $2.4 billion in the same period, as worries over a slowdown in China and sliding commodity prices triggered a flight to safety. At the present market condition, market participants should use the strategy of “buy on dips” as the market is likely to trend up by the end of this calendar.

Global markets cheered Federal Reserve chairperson Janet Yellen's inaction on the interest rate front. As expected, Fed kept its interest rates on hold, but the market was surprised on the forward looking statements and the cautious approach of the chairperson. Janet Yellen showed concern and said that the central bank is juggling mixed economic signals: a strengthening job market but surprisingly weak wage growth. Of late, European Central Bank President Mario Draghi stated that monetary policy alone would not be enough to jump-start the economy and that governments needed to do their job by pushing through structural reforms. Recently, Chinese government has announced a target for 2016 that acknowledges a worsening slowdown. It has lowered its GDP target to 6.5-7%.

On the Commodity market front, dovish statement by Fed Chairman boosted the confidence of the market participants and they parked their money in commodity segment. The weaker US dollar further boosted crude and other commodities. Volatility in equities and oil prices, mixed economic data, and concerns over global growth had curbed expectations for further rises, allowing gold to lift more than 17% in 2016. Gold can trade in the range of 28800-30500 while silver can move in the range of 36000-40000 in the near term. Crude oil may trade on a strong path as a decline in rig count and expectation of production freeze by Russia and Venezuela and decline in greenback can support its prices. Overall Crude oil can move in the range of 2450-2950 in MCX. CPI of UK, Durable Goods Orders of US, CPI of Japan etc; are very few data schedule this week, which can dictate the trend of the commodity market.

Stocks to watch: SBI is on the upside while Crompton Greaves is on the downside.