How do you see the markets panning out on Monday 18th April, as the stock markets open after a gap of 4 days?

On Monday when markets reopen after a gap of 4 days, the markets are likely to witness selling pressure due to the constant pressure of bond yields. The NASDAQ faced a lot of stress on Friday due to the impact of rising yields and that is likely to rub off on Indian markets. The big data point on Monday will be the wholesale inflation (WPI).

The previous truncated week had closed for trading on Wednesday with an early options expiry. On Wednesday, the breadth of the Nifty was unfavourable at 22:28 as VIX stayed put at around 17.79 levels. Last week, Nifty had lost 1.74%. While oil and pharma picked up in the previous week, rate sensitives continue to remain under pressure due to rising yields.

FPIs were net sellers in equities worth Rs.2,061 crore while domestic funds bought Rs.1,411 crore on Wednesday. FPIs were net sellers of Rs.4,500 crore for the week but for April overall, the FPIs are still buyers. Dow was down 114 points while NASDAQ was down 293 points on rising bond yields. European markets were up while SGX Nifty is flat on Monday.

Global markets have been worried about US bond yields to 2.85% levels. Indian bond yields are also inching close to the 7.2% levels. Pressure on Indian markets looks likely. Q4 results of TCS, Infosys and HDFC Bank betrayed some signs of margin pressure and could be a signal of things to come. WPI inflation will be the key data point on Monday.