Violence and hostilities, some perhaps stray in nature, have been attracting great attention. Global markets in turn have been swinging to the beat of political turmoil in the MENA and its impact on crude oil. Hostilities in Libya have intensified, especially around oil assets. Even Saudi Arabia seems to be witnessing sporadic protests.
As if the geopolitical risk was not enough, we have been hit by a few ‘not-so-encouraging’ global economic data. China has reported the worst trade deficit in 7 years – it’s first in 12 months. Japan’s GDP for Q4 CY10 has been lowered. South Korea has hiked rates again. Spain’s debt rating has been downgraded. US weekly jobless claims have increased while its trade deficit has worsened.
For India though there is some good news in the form of robust exports and a steep drop in food inflation. January IIP will be out today. Expectations are low and we do not rule out a positive surprise in the data.
The Nifty is likely to be rangebound between 5400-5560. A breakout of this band either side will determine the near-term direction.
