Today, the outlook is a flat to tad higher opening. Asian markets are mixed. US market got a boost from technology on Friday. Banks pulled down Europe. Christmas is upon us, and the countdown to 2010 has begun. After a stellar year for equities (following a disastrous 2008), some fatigue has set in. So, a wait-and-watch mode is the order for now. The market will continue to consolidate in the remaining sessions, and perhaps even beyond that. Since there will be two extended weekends, volume could dip and volatility might rise. Overall, the market will be insipid.
The near-term trigger will be how the policymakers execute their ‘exit’ strategies. In India, the fear is for an early reversal in loose money policy given the spike in inflation. Earnings will be watched as well, though the focus is now on FY11. Budget will also have a bearing on sentiment.Dollar’s movement and Fed’s action will be crucial for world markets. Liquidity is not an issue for India, but it is time to be selective.
