Today, we expect another positive opening on the back of overnight rally on Wall Street, but the mood could turn a little sour later in the day. European markets too posted smart gains. However, Asian markets are mixed. The opening gains could be limited as profit booking is likely to set in sooner than later.As bulls take charge of the proceedings at start, investors will try to grapple with concerns on valuations. India has always commanded a premium; some more head room is always there. How much is anybody’s guess!
The budget could play some role in shaping the roadmap for the economy and markets. Hopefully, the FM will not disappoint this time. A major concern right now is on inflation. Crude oil has crossed $80 per barrel. Key inflation barometers are hovering between 15-20%.The start of the year wasn’t bad for the bulls across world markets. Strong manufacturing data and favourable comments from Fed officials did the trick. Back home too, the Government is no mood to reverse the fiscal stimulus as yet. Even the monetary tightening is not expected to be aggressive. Possible near-term trigger could come from India Inc’s report card. The critical factor would be the outlook for FY11.
