Today,we are looking for a cautious to slightly lower start, as Asian markets have not been able to extend gains. Japanese stocks are down as a stronger yen has hit export-centric companies. Other regional markets too are flashing the red sign. A lot of economic reports are coming out from the US later this week. One has to see if the fresh set of data points confirm the prognosis that the world is ready to get back on the growth path.
Bulls thundered their way to second successive day of strong gains, thanks largely to strong global cues, especially from Wall Street. Both, FIIs and local institutions threw their weight behind Monday's rally. The gains too were pretty broad-based. Although the undertone remains positive due to upbeat global data points, particularly from the US, the advance may run out of steam on concerns about pricey valuations, flaring inflation and an impending spike in interest rates. Meanwhile, the yield on the benchmark 10-year government bond shot up on Monday on worries about the Centre's massive borrowing programme.
As far as India is concerned, the factors to watch out for are: the shortfall in monsoon rains and its negative fallout on the agri-led consumption story. A further spike in inflation is also imminent and so is hardening of interest rates. How India Inc. copes with these challenges will determine the future course of Dalal Street. For now, one has to deal with growing volatility in the short term.
