A possible strike on Syria by the US, a sliding rupee, tapering off of the American bond-buying programme and populist measures of the government in the run-up to the general election are all going to have a bearing on the markets this week.
However, the fundamentals remain negative and thus volatility is likely to continue.
The Sensex last week was volatile with the benchmark index gaining for four days in a row. In the week, the Sensex gained by over a thousand points (1,036 to be precise).
If one must venture into the markets, experts advice that one must stay in the traditional safe sectors. A caveat: this is not an investment advisory.
You should consult experts before buying any stock.
“Among the sectoral pack, one should still uphold the defensive approach and keep the majority of your investment in pharma, FMCG space, while selected private banking counters can be seen for investment with long-term perspective,” says Jayant Manglik, president of retail distribution, Religare Securities Limited.
A fresh outbreak of conflict in West Asia would increase crude oil prices and adversely affect India’s trade balance and increase fiscal imbalance.
And finally, the US quantitative easing is also something that will influence markets.
“In the near term, the decision of the US Fed on withdrawal of quantitative measures will influence the movement of the rupee,” says Dipen Shah, head of private client group research, Kotak Securities.
The rupee’s slide or gain in the past couple of months has been a major mover of the markets.
‘The Indian stock market is plunging along with the other emerging markets such as Indonesia, Brazil, South Africa and Turkey, which have serious fiscal imbalances,’ says Sharekhan.