Pre Open Thoughts: Bumpy & Choppy!!!

Pre Open Thoughts: Bumpy & Choppy!!!

Ø Cricket is a pressure game, and when it comes to an India-Pakistan match the pressure is doubled. Coming Back to the markets last couple of session lot of selling pressure has been witnessed on the benchmarks and finally, we witnessed what many would call a meaningful correction. The indices deserved some rest after all. Red flags have been raised.

Ø As one says Uncertainty and mystery are energies of life. Don't let them scare you unduly, for they keep boredom at bay and spark creativity.

Ø The market had been looking a wee bit tired lately following with most big events of March behind now, the markets would focus on the global factors and liquidity flows. The Union Budget received a negative response from the equity markets last week. Even the hardening of yields suggested that the bond market wasn’t convinced about the Government’s borrowing target.

Ø The Centre has tried to bridge the budget deficit by raising excise duty and service tax, which are likely to be inflationary. This may force the RBI to postpone the proposed rate cuts. A resultant slowdown would mean difficulty in achieving 7.6% GDP growth. Government borrowings in FY13 may exceed FY12 levels. Consequently, the fiscal deficit could rise to 5.4% of GDP v/s budget estimate of 5.1%.

Ø The start today looks indecisive to say the least. Barring China, most Asian markets are in the green. US stock indices finished flat on Friday while their European counterparts ended higher.

Ø Next month's RBI policy will be the next near-term trigger. It remains to be seen how the central bank views the Budget, particularly the announcements on fiscal consolidation. Whether we are going to see a meaningful pullback from current levels or just a sideways consolidation only time will tell. So, hang on tight as the near-term ride could turn a little bumpy and likely to be choppy and range bound.

Ø According to systems the Nifty may trade between 5200 and 5500 in the short term.

Ø The FIIs were net buyers of Rs 8.83bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers of Rs 7.7bn, as per the provisional figures released by the NSE.