Today, we expect some cooling as global cues are negative. Technically, 3150 (Nifty) is seen to be a crucial near-term level. The recent rally has caught most market players by surprise, especially after the crash that preceded it. Risk aversion has receded a bit, underscored by the spike in emerging market currencies and commodities. FIIs have turned net buyers in the past few days. All this has happened on the back of a few encouraging news, particularly in the US. Back home too, few positive signs are emerging like the increase in sales of auto, cement and steel sectors.
However, one should not get fooled by the slight improvement in sentiment. A sustained recovery is still far away. What we have witnessed is just a pull-back rally in a bear market. There has to be incremental positive news, both locally and globally, to fuel further advance. April is likely to be critical in this context what with polls and earnings lined up as key events.
