Today, it’s just another Monday morning as we expect a weak opening for our markets. The earth has nothing much to laugh about, with the monsoon refusing to pour down in abundance. Concerns about drought and its adverse fallout on the economic recovery will weigh on the sentiment. Food prices, which are already soaring, could gain further due to shortfall in farm output. Whether the Centre will announce fresh freebies and goodies remains to be seen amid an already precarious fiscal situation.
After Germany and France, government data shows that Japan too pulled out of the recession in the April-June quarter. However, most Asian markets are down 1-2%. Wall Street and Europe too ended down on Friday.
Technically speaking, the Nifty is likely to remain in a broad range of 4300-4700. We are in for a major tug-of-war among the bulls and the bears in the near term.
Investors are looking for clearer and concrete signs of an economic recovery. A 10-15% correction should not surprise anyone. The fear of missing out on another round of rally could arrest any major sell-off. On the whole, the market is likely to be sideways and uncertain. Volatility is a given and one should also keep an eye on traded volume, aside from of course the fund flows.