Today, Stock markets provide opportunities at all times. Last year’s crash was one of them. The current consolidation is no exception either. Today we expect a flat start due to subdued global markets. In the near-term, the key indices will continue to swing in a range, which is pegged at 4900-5200 on the Nifty. To ride out this volatility one needs to focus on one’s portfolio. Get rid of the laggards and bet on companies with good earnings visibility. As far as the global markets go, concerns about Dubai's debt troubles appear to be easing. World trade in equities continues to be driven by the US dollar’s weakness. Risky assets such as emerging market equities and currencies are being lapped up. Commodities too have benefited. Gold is hitting new highs every day.
But, the rise in risk appetite is being tempered by some degree of caution after the spectacular rally from the lows of March. From here on, incremental ‘good news’ has to be really strong for the current momentum to sustain. A big worry is on how the ‘exit’ strategies unfold.Though long-term prospects for India remain positive, a number of factors could pose a challenge. Among the key ones include an imminent hike in interest rates, spiraling inflation, a yawning fiscal deficit, anemic credit growth, bleeding exports and shrinking tax receipts.
