The
start today could be a tad better after US stocks snapped an
eight-session losing streak. Asian markets are not doing too badly. The
big question is whether we can covert any relief pop into wider gains.
Given the macro-economic backdrop (both local and global), that may be
slightly tough.
Locally,
elevated inflation and its impact on interest rates is the biggest
headwind. GDP growth forecast has also been scaled down. Monsoon has
been below par. There are fears of the Government overshooting its
budget deficit. Disinvestment is in a limbo. The Centre is under attack
for a number of issues – from corruption to economic management. The RBI
is no mood to relent even as it seeks support from New Delhi.
Overseas
too things appear to have gone from bad to worse. The US has managed to
avert a default but worries prevail over a possible downgrade. Recent
data points have not been encouraging. The debt crisis continues to
hound the eurozone.
A sideways pattern with a negative bias is what we foresee in the near term. The key indices may trade in a tight band.
