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Shares seen around current levels this week; IIP key

The markets are likely to remain around current levels this week as investors wait for the government to implement the recently announced reform measures.

"Any further sustainable rise in the markets will be led only by implementation of the reforms. The implementation of reforms is necessary to encourage more investments and help sustain the earnings and valuations at current levels," BNP Paribas Wealth Management said in a note.

However, industrial output for August to be released on Friday will be crucial as the data comes ahead of the Reserve Bank of India policy review on 30 October.

A weak data-though it has lost its credibility due to the volatility-is likely to give rise to hopes that the central bank may finally budge on rate cut calls, especially since Finance Minister is expected to meet regulators, SEBI and RBI, this weekend.

There are chances of the data may point to economic weakness as the core sector output growth during the month has already been weak at 2.1 percent.

A weak data-though it has lost its credibility due to the volatility-is likely to give rise to hopes that the central bank may finally budge on rate cut calls, especially since Finance Minister is expected to meet regulators, SEBI and RBI, this weekend.

SEBI is also likely to come out with a few announcements today after its board meet.

Another important even this week the earnings of the IT bellwether Infosys Ltd on 12 October. Nomura has said it expects Infosys to see a lower growth differential during the second quarter at 3.2 percent on quarter.

"We expect Infosys to retain its FY13F USDrevenue growth guidance of 5% on an organic basis and cut EPS guidance by 2% to ~INR163 on INR appreciation," it said in a pre-earnings note.

Month ahead

Deven Choksey, managing director, Kisan Ratilal Choksey Shares and Securities Pvt. Ltd, sees the Nifty moving in the range of 5630-5830 this month.

"After the 8 percent run-up, the Indian markets can take a breather at the current levels of 19,000 and can correct to Sensex levels of 18,000 and below, which could give a entry point for investors," BNP Paribas's note said.

BNP Paribas advises investors to hold on to equity allocations and book profit selectively on market rallies.