Pre Market Commentary ...

Yes, there is some profit to be made from the global rebound this morning, but one should not get carried away as the advance may run out of steam after a while. We expect a positive start following further improvement in risk tolerance worldwide. Early gains may not hold though and the market may once again turn choppy and rangebound. Near-term sentiment may remain at the mercy of global events even as earnings continue to trickle in, both here and  overseas. Monsoon will be the next big event on the domestic calendar.

Meanwhile, the Government has been able to ward off the Opposition challenge in parliament and has passed the Finance Bill. It is also set to garner much more from the 3G-BWA auctions than what had been estimated earlier. So, the fiscal deficit for FY11 may look a tad better. The challenge is to maintain fiscal discipline by cutting wasteful spending rather than relying on extraordinary income.

April was a dull month for Indian equities, as the main indices were stuck in a range. A breakout from the current range may continue to elude us unless we have a major global rally. So, it would be wise to stay cautious though there is no need to panic. Be selective and careful in picking stocks, especially the small- and mid-cap ones.