What is your view for the markets as a new financial year starts on 01st April? Do you see positive returns on Friday on Nifty and Sensex?

The markets were volatile with minor losses on Thursday as the institutions maintained steady flows on the last day in order to maintain their net portfolio values for the fiscal year. However, the overall breadth of the market remained negative post the Russian announcement about shifting to a rouble / gold peg instead of the dollar.

Overall the breadth of Nifty was negative with A/D ratio at 20:30 for the 50 stocks on the index. However, the good news is that despite the uncertainty caused by the gold peg of the Rouble, the VIX tapered lower to the 20.56 levels. For now, it does look like most of the major uncertainty in the market is already factored in.

FIIs net bought Rs.3,089 crore of equities while domestic funds and LIC bought Rs.1,145 crore on Thursday. Funds typically hold NAV values by buying on the last day. In global markets, the Rouble gold peg seems to have spooked the markets. Dow fell 554 points while NASDAQ was down 222 points as Western currencies come under pressure. Europe was 1-2% lower while SGX Nifty is trading 55 bps lower in early trades on Friday.

The big news that will have an impact on the markets is the decision by Russia to peg the Rouble to gold instead of to the dollar. Their insistence that EU pay for oil and gas in Roubles or in gold is likely to change global currency equations. In Indian markets, it remains to be seen what it means for dollar value and its implications for Indian IT companies, which are predominantly earning in dollars. You can also expect some weekend selling in markets.