Today, we expect a slightly lower opening due to weak global cues. The usual wild swing associated with F&O expiry would be there. Overall, we maintain our cautiously optimistic stance. Some seem to be getting the perfect festival bonanza with Top IT companies doling out generous pay hikes and promotions. Last week, the Government had announced a hike in DA. The real estate industry has also resumed hiring. India Inc.’s fund raising binge continues. Bank lending has seen a pick up in Q2.
FIIs remain bullish on India and have pumped $10bn already. The demons over the aftereffects of drought have been pretty much exorcised. Globally too, things have improved quite a bit with the Dow nearing 10,000. Central banks are in no hurry to start reversing their extraordinary stimulus steps. Overall business-cum-investment sentiment is upbeat and risk appetite is back.
Among the concerns are with regard to inflation, though most central banks are willing to ignore it for a while. The other challenge will be to unwind the expansionary monetary and fiscal stimulus. Valuations too are not cheap, especially when promoters of large firms are selling.
