Indian markets closed on a quiet note despite receiving positive global cues. The 50-share NSE Nifty settled at 5,481.70, up 0.7 points, while the 30-share BSE Sensex closed at 18,300.9, up just 27.10 points. As far as impact of the upcoming budget is concerned, most experts have expressed a neutral opinion.
Mehraboon Irani, Principal and Head-Private Client Group Business, Nirmal Bang Securities, feels that the next few days will be very crucial for the markets. "They may still falter because the headwinds are very much there but pockets of opportunities are also available in the market. Investors need to select stocks very carefully as the markets are still very negative. He continues to be quite confident of seeing a new high in 2011 itself.
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According to Jai Bala, Chief Market Technician, cashthechaos.com, the markets are very close to the end of the collective rise and looking at the historical trend, markets have never corrected more than 16% all through the current rise from the lows seen in 2009. In Bala’s opinion, markets are not underpinned by fresh buying interests for people trying to add new stocks to their portfolio.
Talking about the Nifty’s rally, he said, "It is not going to exceed 5,565 as another round of selling is due. My suspicion is that markets have got one more leg of downside. It will be slightly below the lows it made a few days ago."
Will markets be more stable post budget?
As far as budgetary impact is concerned, Bala feels that if the government is able to show some urgency to address the fiscal problem and meet the investor expectations, the markets will be happy. However, he feels the market should not be too affected by the budget.
Ambreesh Baliga of Karvy Stock Broking feels that it is good for the markets if they are consolidating before the next move. "I see Nifty in the 5,500-5,600 band, and over the next couple of days we could touch those levels of closer to 5,600." He quickly added that we cannot rule out the panic in the markets, however, assuming that there is no other adverse news on scam or other front; the markets should be in the range closer to 5,500-5,600, at least before budget.
Reacting on the Prime Minister’s interaction with media, Baliga appreciated PM’s approach of addressing the market issues on a sentimental note. While talking about the budget, he said, "When markets move beyond 5,700-5,800, it is a major resistance for the market overall, so, it clearly depends on how the budget is. Otherwise, assuming that the budget is market neutral or slightly negative, we would be in the range of 5,200 to 5,600."
He also said that the post-budget process of cabinet reshuffle should create a positive impact on the market and the economy.
