What is your view on the stock markets for 18th January after the relatively strong show on Monday?

Monday marked a strong opening for the stock markets with the Nifty up by 52 points higher at 18,308 levels. The indices are still below their October peaks but the market cap has crossed Rs.280 trillion. The markets reacted positively to the IT numbers and to the weekend numbers of HDFC Bank and Ultratech on Monday.

Nifty closed on Monday with a positive advance decline ratio of 34:16 while the VIX ratio ha stayed around the 16.77 levels. That makes the market still open to a buy-on-dips kind of a strategy. The big gainer was Hero Moto after it announced green plans via Ather Energy. Other gainers of the day included GRASIM, Ultratech, Tata Motors and ONGC.

Foreign investors net sold Rs.856 crore in equities while domestic funds sold Rs.115 crore on Monday. Rising crude prices and spiking bond yields remain a broad macro concern for Indian markets. Globally, only the Dow was down on yield concerns. The NASDAQ and the European markets were in the green. SGX Nifty is flat in early trades.

In the coming days, the macros will start playing a more critical role. Crude is at a 3-year high and higher bond yields are going to make government borrowings costlier. This also means higher inflation in the coming months. Overall, the big concern looks to be at a macro level, even as results continue to be positive.