A
wonderful Wednesday lay in store as the worries of the world take a
backseat. After a couple of nerve-wrecking and highly volatile sessions,
some semblance of stability was much needed. US stocks survived a
mid-session drop to end smartly higher. Fed’s assurance that it will
keep rates at record low till at least the middle of 2013 was the main
driving force. European markets too rebounded from day’s lows. Asian
markets are hale and hearty this morning. And of course, the start on
local bourses will also be positive.
How long we can sustain this relief rally is the question now.
Much
will hinge on the upcoming data points from the US, Eurozone and other
important parts of the world. Any policy action to perk up sentiment may
also come in handy.
For
India, the key catalysts could be sharply lower commodity prices,
particularly that of crude oil. There may also be some relief on fuel
prices if crude stays low. One must navigate the next few days
carefully, as markets begin to settle down. Fund flows will also be
important for India and so will be Friday’s IIP data.
