Today,we expect a subdued opening owing to mixed global cues. Asian markets are down mostly, barring Japan. Chinese markets will resume trading next week. US stocks closed higher and European stocks rose for a third straight session. We expect a choppy session with a slightly positive bias. The run-up if any to the budget can be used to get out of event-related counters.
The spurts of green in recent times give some confidence that the world has weathered the financial storm well so far. We still have to get out of the woods and on to a highway. For every 2-3 good news is encountered with a set of bad news, which sometimes triggers unnecessary panic. China is overheated while Europe is facing certain debt issues. The US is growing but the quality of recovery is questionable. Unemployment is still pretty high in the matured economies.
For India, the big issue is inflation and its broader economic fallout. Interest rates are set to head north, slowly but surely; need not be steadily though. The Government has limited elbow room on account of a bloated fiscal deficit. With the economy doing well, a partial rollback of fiscal stimulus is definitely on the cards.
