Today we expect a flat opening due to indecisive global cues. The Dow Jones has closed below 10,000. Stocks in Europe finished higher. Asia is pretty much mixed.
We now have statistical evidence to substantiate that the green shoots in India have blossomed further. Apart from the subdued credit growth and tepid tax receipts (partly owing to fiscal stimulus) most other economic indicators have improved substantially.
The ball is now in the Finance Minister’s court. In that context, Feb. 26 will be a crucial day. Pranab Mukherjee is likely to take a calibrated approach to unwinding the fiscal stimulus. He has his task cut out on the fiscal front. So, we expect him to articulate strategy to return to the path of fiscal prudence. Any deviation from this will be disappointing.
Derivative indicators are pointing to further weakness. Technically, 4700 could give near-term support to the Nifty while resistance might kick in at 4800. The 200 DMA of 4640 will continue to be a crucial level to watch.
