Pre Open Thoughts: Expiry eve…Delicately poised
Ø Bad times have a scientific value. These are occasions a good learner would not miss. Indian economy has hit a rough patch amid mounting concerns about the GAAR. The undercurrent continues to be jittery over the impact of the proposed GAAR tax regulations on FII investments through Mauritius and via Participatory Notes (PNs).
Ø However, the uncertainties is not likely to end soon. As a result, the market is unlikely to heave a sigh of relief until the matter is settled. There has been sudden drop in FII inflows in the past couple of sessions is testimony of escalating tension on the GAAR issue.
Ø A plunge at start is a given and we really can’t give hopes of a recovery later. Offshore markets will have to change the sentiment. Asian stocks are mostly down. For India, the big worry right now is the relentless slide in the Rupee. This has increased the headache for policymakers who have their hands full with a whole host of problems.
Ø The market is delicately poised with the Nifty just below 5200. As we head in crucial trading day for current fiscal and Current month’s F&O contracts take centerstage.
Ø Given this rather bleak backdrop and lack of participation among market players, it would be prudent to stay quiet for a while. We advocate caution at current levels with immediate support at 5170-5150.
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