The Indian market may witness range bound trading on Monday, tracking mixed global cues. U.S. stocks finished Friday's session higher, but were softer on a weekly basis, while Asian stocks are currently trading mixed after U.S. President Barack Obama said the government is " running out of time" to reach a deal on the nation's debt limit, which is necessary to avoid a default.
Meanwhile, the much anticipated stress test results of European banks have finally been released. Eight of 90 banks in Europe have failed the European Banking Authority's stress tests, with a combined capital shortfall of 3.5 billion euros, while another sixteen banks have barely passed the tests with their Core Tier 1 Ratio close to the 5 percent threshold, ranging about 5 percent to 6 percent. The EBA has asked them to take "specific steps to strengthen their capital position.
Closer home, investors are likely to adopt a cautious approach this week, as they look ahead to RBI's quarterly review of the economy and monetary policy on July 26. With inflation expected to remain at above 9 percent in the coming months, analysts feel that there is probably a need for more monetary tightening over the next six to nine months.
With the earnings of information technology companies remaining a mixed bag, investors are looking for a booster dose from Wipro and HDFC results this week. The progress of monsoon rains and crude oil prices movements are the other factors that may influence market sentiment.
The benchmark indexes Sensex and the Nifty fell about 1.5 percent each last week, weighed down by a string of concerns like Mumbai blasts, weaker industrial production data and global debt worries.
On Wall Street, stocks posted modest gains on Friday, as upbeat positive earnings news offset economic concerns and uncertainty about the debt limit. The Dow rose 0.3 percent, the Nasdaq jumped around a percent and the S&P 500 added 0.6 percent.
Crude oil prices ended higher on Friday amid lower supplies. A firm trend in equities market on the back of reasonably favorable results of a stress test on European banks also contributed to the surge. Light sweet crude for August delivery ended up $1.55 at $97.24 a barrel on the New York Mercantile Exchange.
For comments and feedback: editorial@rttnews.com