Today, after the Monday Mayhem, we witnessed a classic Tuesday Turnaround. The rebound was largely led by short covering and buying in defensives like FMCG shares. Derivative indicators show that 4900 will remain a key short-term support. So what’s up on Wednesday? We expect to see a firm start as most world markets are up smartly. Commodities have too resumed their northbound journey while the dollar is getting pummeled.
Trading screens have turned green again after the recent retreat that had seen indices pull back from multi-month highs. In the near-term, the Indian market will swing to the beats of the global cues and earnings. Overall trend appears positive though volatility will remain elevated. Australia has already blinked by raising rates.
The RBI chief too has been talking of an exit from the accommodative monetary stance. Watch out for the mid-term policy review. Inflation will continue to have a bearing on equities and interest rates are also set to harden. Quite a few have lately cautioned on the sharp run-up in stocks and even commodities, citing a fragile recovery in the advanced economies.
