Another subdued opening is in store. Overseas cues are mostly negative. Friday’s big FII selling could hit sentiment though Monday’s provisional numbers are not that bad. While inflation came in just about in line with estimates, it continues to be above the comfort zone.
More than the April headline print, markets are probably more worried about the sharp revision in the February number. In fact, even the March reading has been revised up slightly. Not only that, the RBI Governor has hinted at further tightening to soften inflation. This will not go down well with the markets.
Markets have lost momentum for sure, not just in India but across the globe. At least we don’t have to fear a freeze on the indices which happened on this day many years ago.
The key Indian indices are currently stuck in a state of flux. Adverse news is overshadowing positive events, whether it’s the correction in commodities, state election results or corporate earnings.
This sideways consolidation may continue for a while before there is a meaningful breakout. Since the near-term outlook is murky, one must remain on guard and take measured steps.
