Not too long ago, levels of 5400 and 5500 were almost a given for the Nifty. In a matter of few days the situation seems to have turned a little worse for the bulls. In fact, the Nifty is all set to lose its grip over 5200, at least at the start. Whether it is able to reclaim 5200 by the close will hinge on the newsflow and today's results.
Overall, the mood will be one of caution ahead of the RBI annual policy meet tomorrow. Consensus forecast is for a 25 bps hike in key policy rates and a 50 bps increase in the CRR. The RBI’s commentary will be keenly followed for gauging the mood on Mint Street. The Goldman Sachs issues and its broader fallout will also vie for attention. Usually, stocks where there is a holdings could see knee-jerk reactions.
Though inflation didn’t cross 10% in March, food inflation is near 18% and non-food prices are threatening to spike as well. Monsoon will critical this year after last year’s near disaster. How the world economy does over the next few months will have a bearing on sentiment. Also important will be the trend in fund flows and movement in other markets like currency and commodities. Earnings upgrades or downgrades will also play a crucial role so will Government's policy decisions, if any.
Airlines may remain under pressure as air travel globally remains disrupted due to the volcanic eruption in Iceland. Financials will be in focus ahead of the RBI announcement and also partly owing to the Goldman Sachs imbroglio. IPL-linked stocks may come under the spotlight amid more startling revelations on the alleged big scam.
