Today, we expect a cautious start and some profit booking. The bulls have had their place in the sun even as monsoon, moon, sun and stars seem to be hogging the headlines. Monday was the 40th anniversary of the first ever manned moon mission. Meanwhile, the longest full solar eclipse this century will pass over India and China on Wednesday.
Coming to the markets, the fortunes continue to fluctuate depending on whether one is a bull or a bear. Right now, the bulls seem to be holding an upper hand. And, the Finance Minister could be having a quiet smirk now that the Sensex has erased all the post-budget losses. What’s more, the key indices are within striking distance of the highs hit in June.
Milestones may be crossed and new ones will be made. But, valuations have zoomed from the lows struck last year. Sooner or later this factor will put a lid on any unbridled rally, as fundamentals are yet to return to pre-recession levels. The market will remain volatile till news turns ‘good’ on a sustained basis.
Global equity markets appear to be clawing their way back after a brief period of consolidation. The catalyst(s) are not new - a few positive economic reports and better corporate earnings. The big question is whether this momentum can be carried forward? If yes, then for how long? We are bound to meet roadblocks along the way. The moot point is that the market is delicately poised, and is only reacting to daily dose of news (both local and global).
For every good news there is a bad news. It depends on what you choose to focus on. This makes the market vulnerable to wild fluctuations. But, the swings continue to baffle and bamboozle even the smartest of market pundits and traders. The best thing to do would be to act judiciously whether you are buying or selling, as the market could remain choppy for quite a while.
