Pre Market Commentary ...

Nearly five years after the big Reliance empire was split, the warring Ambani brothers have decided to bury the hatchet. The new peace deal in the Ambani family will surely prove to be a sentiment-booster for our market, which was starved of positive triggers. It’s a no-brainer that shares of the two Reliance groups will steal the limelight, although one is still not sure of the long-term impact of the truce. What’s more, Asian markets, barring Japan, are mostly positive. The good news is that the rally is being led by China, which has been the worst-performing market this year. A meeting of the China-US Strategic and Economic Dialogue takes place in Beijing until May 25. The strength of the Chinese currency is a likely topic.

Given the feel-good backdrop, we expect a firm opening and perhaps a positive finish too. If global cues remain supportive and there are no fresh mishaps, the markets will be able to regain some of the lost ground. Some risks may still persist mainly due to concerns about the European sovereign debt problems and possible overheating in China. In the immediate future, the key events to watch out for will be next week’s GDP report and progress of monsoon. A spate of global data points will also have to be factored in. The market may remain choppy owing to the F&O expiry on Thursday and continuing uncertainty over the euro-zone debt crisis.