Things are far from rosy for the market. The popular color of the rose is splashed across Asian markets. Like most Mondays, a lower opening is in the offing. The real green shoots may be mushrooming with the little rains but the economic ones seem to have floundered. The budget only added to the renewed pessimism, (though expectations had reached stratospheric levels). So, a correction was bound to happen. To get in or get out, that may be the questions. Equities have historically given superior returns and there is no reason why you should think otherwise for the future too.
We are in the midst of a consolidation phase after a strong rally. A rollercoaster ride is in store in the near term with bears slightly better placed. The upside appears to be capped for now. The global picture has also turned pale after briefly promising faster turnaround. Monsoon jitters haven’t yet vanished. Quarterly earnings will also have a bearing on the sentiment.
One virtue that the market should inculcate quickly is patience, as the UPA is unlikely to follow its therapy of growth. It will persist with its counter-cyclical spending spree and inclusive growth agenda. Reforms may happen, but surely not at supersonic speed that the market had been hoping for.
There could be some rebound after last week's 10% crack in the key indices. But, one should not get trapped in it as the undertone has turned a little weaker post budget. And, unless quarterly earnings spring a big surprise, the market is more likely to drift down than stage a smart comeback anytime soon.
