Markets have been trading in the range for the past few weeks. And surprisingly, have hold very well after the recent up move. One would have expected the correction to have come thick and fast, but the markets have refused to comply with the bear wishes. There are many people waiting for the market to fall, and as the reports claim, there is plenty of fund lying on the sidelines which has to be deployed.
I’ve become slightly bearish now on the markets, and think everything has moved up all too fast and too much. As for the markets holding up, I think its more of funds trying to play catch up, and investing late into the rally. We have seen good buying by the domestic funds in the past couple of weeks.
There are plenty of things that could decide the market moves in the coming weeks. And given that the list is quite long, I would expect the volatility to move higher from the current levels.
1. Quarterly results of domestic companies: With the result season starting, we may have a few surprises. Already we have seen some patterns with the advance tax numbers (with banks posting good results, while manufacturing sector lagging), and we may see high dispersion between sectors in their results.
2. US Bank results: No longer the size they used to be a year or two back, the US bank results still are eagerly awaited. They had all posted very good numbers in the last quarter, and another good showing could really seal off the recession here. However, a set of bad numbers could really hurt badly as well.
3. Indian Budget: With budget coming in the first week of July, expectations are quite high with the dream team. However, as with the T20 World Cup, expectations may well have exceeded the upcoming reality.
4. Swine Flu: Markets have completely stopped reacting to any news on this front. With fresh cases being reported almost everyday now, it might surprise the markets on the downside.
5. Budget Deficits: With all the governments around the world facing huge and still mounting budget deficit, we may see rates rising through the roof. Already we have had a failed auction, and a couple more could be the trigger for this.
6. Oil: Oil has slowly moved from 40-something to 70s now, and its not far away from where it would start hurting India. A level above 80 in the next couple of weeks, and then we would start having pressure on the currency again.
7. FII Selling: FIIs have been sellers in the market over the last 1 month or so, and if the selling continues, we may well see both INR and Equity Markets falling back to the earlier lows.
I’ve become slightly bearish now on the markets, and think everything has moved up all too fast and too much. As for the markets holding up, I think its more of funds trying to play catch up, and investing late into the rally. We have seen good buying by the domestic funds in the past couple of weeks.
There are plenty of things that could decide the market moves in the coming weeks. And given that the list is quite long, I would expect the volatility to move higher from the current levels.
1. Quarterly results of domestic companies: With the result season starting, we may have a few surprises. Already we have seen some patterns with the advance tax numbers (with banks posting good results, while manufacturing sector lagging), and we may see high dispersion between sectors in their results.
2. US Bank results: No longer the size they used to be a year or two back, the US bank results still are eagerly awaited. They had all posted very good numbers in the last quarter, and another good showing could really seal off the recession here. However, a set of bad numbers could really hurt badly as well.
3. Indian Budget: With budget coming in the first week of July, expectations are quite high with the dream team. However, as with the T20 World Cup, expectations may well have exceeded the upcoming reality.
4. Swine Flu: Markets have completely stopped reacting to any news on this front. With fresh cases being reported almost everyday now, it might surprise the markets on the downside.
5. Budget Deficits: With all the governments around the world facing huge and still mounting budget deficit, we may see rates rising through the roof. Already we have had a failed auction, and a couple more could be the trigger for this.
6. Oil: Oil has slowly moved from 40-something to 70s now, and its not far away from where it would start hurting India. A level above 80 in the next couple of weeks, and then we would start having pressure on the currency again.
7. FII Selling: FIIs have been sellers in the market over the last 1 month or so, and if the selling continues, we may well see both INR and Equity Markets falling back to the earlier lows.
No comments:
Post a Comment