Parliament's monsoon session and corporate results to dictate the market trend

All eyes will be on the monsoon session of parliament which begins on Tuesday. The government will introduce eight new bills and take up 11 pending bills including the controversial Land Bill and the GST Bill, for consideration and passage. It would also be a test for the government as it would require passing the crucial GST Bill if it has to implement the new indirect tax regime from April 2016.

The focus will continue to remain on the corporate quarterly results of key companies like Reliance Industries, Infosys Technologies, Hindustan Unilever, HDFC Bank, Wipro, Lupin, UltraTech Cement, Axis Bank and Bajaj Auto.

Meanwhile one would like to believe that the Greece crisis is over but one still has to be careful and keep an eye on the events unfolding in the Euro-zone.

Coming back to the Indian market, the rise in the market will depend upon the corporate performance which is on a slowdown. Due to huge debt of corporate India, it will be time before we see the debt reducing and an improvement in the corporate earnings of India Inc. Apart from the large debts, corporate India has restricted itself from getting into new large projects as well as capacity expansion.

Until new projects and capacity expansion doesn't come up, we aren't expected to see much improvement in corporate performance. Till then the stock market will be driven by global cues and foreign institutional inflows. In the recent past the domestic inflow has increased because asset class like gold and real estate have been underperforming which saw a shift of money into equities. Going ahead this flow from domestic investors is not expected to be huge. Meanwhile other investors like retail, private equity and insurance players are still not firing which would mean market would depend on foreign flows.

At current market levels with no major positives the chances of market to correct is higher. Even a correction at these levels is expected to be sharp following huge and easy liquidity available across the globe. Lack of trigger may see the market consolidating and moving in a range of 1,500 to 2,000 points. However for investors, they should bet only on companies with strong fundamentals that have a positive cash flow and have the pricing power for its products.