This week will see benchmark indices, the Nifty and the Sensex, remaining range bound prior to Thursday's F&O expiry.
Any movement would be within two to three per cent each on either side of last week's closing prices. However, stock-specific action will continue during the result season.
A fuel price hike could be announced around the month-end. Bond yields are likely to go up on increase in supply of government bonds, crude oil and inflation (caused by a hike in excise duty).
Yields will inch towards 8.60-8.65 per cent levels and a new range is likely to be created by May. The rupee may strengthen to Rs 50.90 levels to a dollar if it breaches 51.56 levels.
G-20 Observations
The G-20 meeting in Washington last week increased the IMF's war chest by $430 billion.
The group of ministers observed that growth expectations would remain moderate in 2012.
They said that reducing sovereign debt was constraining an increase in consumption and growing investment worldwide.
The group is committed to growth support, job creation, structural reforms and support medium term fiscal sustainability.
There was agreement to enhance IMF surveillance framework focussing on financial stability and policy spill over from one country to another.
A global framework for central counterparties as an important element in over-the-counter derivatives was discussed.
Also on the anvil are globally accepted single set of accounting standards worldwide by converging the IASB and FASB by mid- 2013.
The US 10 yr- treasuries will be range-bound between 1.95 per cent and 2.35 per cent levels.
Yields may soften if quantitative easing (QE3) is injected by the Fed this week. Only a fresh round of concerns in Europe has the capacity to spoil the party and ensure that yields harden.
The Euro likely to while away time this week and any gains versus the $ will be short-lived. It is expected to hover around $1.3315 to a Euro this week.
Nymex crude futures may break out if it crosses $106.85 to a barrel and signal a sharp up move. Gold is expected to strengthen by around four to five per cent this week in dollar terms to nearly $1,715 to an ounce.