We expect stocks to remain lackluster and sideways in the near term without any specific bias. With most good news discounted, the market is now anxiously awaiting the next batch of positive triggers. At the same time, the poor monsoon has added to concerns that inflation will shoot up.In fact, CPI has already started inching up, with most indices at around 10-12%. Even the WPI inflation is expected to turn positive in the run up to festivals.
The Government and the RBI have their task clearly cut out. With stock valuations not cheap and uncertainty in global markets, the market will find it tough to make new highs.
