REUTERS - A mild correction saw the Nifty ending at 9,285, down 0.6 percent after it was unable to sustain a fresh life high during the week. Investor sentiments were hit after service sector activity had its slowest increase in output in the last three month. Uncertainty over the French presidential election results also kept the markets on edge.

Commodities were under pressure with crude oil, precious metals and some base metals correcting. The week also saw a lot of global market action, mainly U.S. President Donald Trump getting his new healthcare bill passed in the lower chamber of Congress. Closer home, in an important step, the government notified Banking Regulation (Amendment) Ordinance, 2017.

The week’s stock action was dominated by ICICI Bank, which gained 9 percent after core profitability surprised positively. The top gainer was Indiabulls Housing, up 10 percent. Tata Motors was the top loser after Jaguar Land Rover saw a drop in sales in April due to a substantial fall in demand from the UK and other overseas markets. Lupin too fell heavily as other pharma stocks followed suit.

The U.S. Federal Reserve kept rates unchanged, largely in line with market expectations. Crude oil prices fell during the week with futures at the lowest level since November. OPEC and non-OPEC nations are expected to take a decision on May 25 to extend the deal to curb oil output. Gold prices fell to a six-week low as the dollar strengthened after indications from the Federal Reserve that it could raise interest rates as early as June. Select commodities also fell on worries about Chinese demand and, in most cases, excessive supply.

Crucial U.S. jobs data came out substantially better than expected indicating that March may just have been an exception in an otherwise positively trending U.S. employment environment.

Back home, in an important development for government efforts to tackle NPAs, President Pranab Mukherjee approved an ordinance to enhance the Reserve Bank of India’s powers to resolve the bad loan problem. It’s too early to say whether it will succeed in sorting out the NPA mess. Banking stocks, especially PSU banks, saw a sharp sell-off after the announcement.

The Cabinet cleared the national steel policy that favours domestic manufacturers in government projects and also approved modifications in the recommendations of the seventh Central Pay Commission.

Automobile sales numbers for April were mixed. Domestic passenger vehicles continued the uptrend with around 15 percent growth, driven by new products and discounts. But two-wheeler sales at Bajaj Auto and Hero MotoCorp declined. Going ahead, auto sales are expected to improve driven by rural demand and new launches.

Fitch kept India's sovereign rating unchanged at 'BBB-', the lowest investment grade with stable outlook. But it expects the growth rate to accelerate to 7.7 percent in FY17 and FY18 from 7.1 percent in FY16.

In the coming week, the outcome of the French presidential election would be crucial for global markets. Centrist candidate Emmanuel Macron is expected to win after latest polling showed his lead widening.

On the global front, the Bank of England will announce its monetary policy decision on May 11. Domestic results season will continue to drive markets with heavyweights such as Bharti Airtel, Hero Motocorp, Petronet LNG, ZEE, Asian Paints, and Dr Reddy’s Labs. One would also need to keep tabs on the geo-political tensions between the United States and North Korea.

Though Indian markets have corrected mildly, valuations continue to be stretched as we approach monsoon reason and GST implementation, both of which could have a major bearing on the future course of the market. This is a traders’ market and investors need to be patient with their liquidity.

(Ambareesh Baliga has about 25 years of experience in the stock market and has worked with Karvy and Kotak groups in the past. He is a regular market commentator on various business channels. He is a commerce graduate from Calcutta University and a qualified cost accountant.)