Today,brace for a gap-down opening as world markets are in a tizzy amid escalating concerns over the mounting debt problems in a few European nations. Whether the market manages to rebound remains to be seen as FIIs don’t seem to be in a mood to reverse their selling binge, at least for now.
Yesterday only we had warned against getting carried away with Wednesday’s rally. Unfortunately for the bulls, that prediction turned out to be a prophetic one. For those who heeded our advice though might have done better than most. Risk aversion has risen of late amid a spate of fresh worries from China’s tightening, to new restrictions for US banks to sovereign debt concerns in Europe.
For India, the big concern remains in the form of inflation and its ramifications on the stimulus-fueled recovery. The big event for India will be the Union Budget. Expectations are already building up. The Finance Minister has its task cut out with a yawning fiscal deficit staring him in the face. The 3G auction fiasco coupled with the lukewarm response to the NTPC FPO are only adding to his troubles. Some key support levels could melt amid the world-wide crash. Nifty futures trading in Singapore are down over 2% as of now. The Nifty could find support at 4740-4750. If there is no improvement in Asian markets, it could even fall below 4700. If the market rebounds, which could be either today or next week, the Nifty is likely to meet resistance at around 4900.
