HT Image
HT Image

Global cues point to weak opening for Indian market

Markets are likely to look at global markets for cues the way the US and European markets closed on Friday, reports MC Vaijayanthi.
Hindustan Times | By MC Vaijayanthi, Mumbai
UPDATED ON MAR 02, 2008 10:20 PM IST

With Union Budget 2008-09 behind us, Indian stock markets are likely to look at global markets for cues, and that definitely is not positive looking that the way the US and European markets closed on Friday.

Dow Jones plunged 315 points, Nasdaq 60 points and UK’s FTSE 100 by 81 points. India’s benchmark index Sensex and Nifty traded range bound last week and on Friday, the day of the Budget presentation remained totally in red. Analysts expect prices to remain volatile this week as global markets keep an eye on loads of US economic data to be unveiled and as US Fed official speak on economy.

“Markets would correct a little more not because of the budget but due to global conditionis and there could be one or two months of pain,” said Nilesh Shah, CEO, Ambit Capital. There is a possibility that markets would go down a little more but after that there should consolidation, says Anita Gandhi of Arihant Capital, with a bit of optimism. Oil prices hovering around $100 dollars a barrel, fear or inflation and slowdown in growth are all worrying the global markets.

The sentimental effect of additional tax burden on the market participants is also expected to weigh down on markets in the near term. “The markets did not expect much, but the fact that corporate taxes and STT were not raised , and long term capital gains tax was not tinkered with is a positive for investors. We don't expect any more reforms till the formation of the next government,” said Ajay Bagga, CEO of Lotus Mutual Fund. He says the best strategy in a high inflation, slower growth economy in a global recessionary environment is bottom up and value based stock picking and domestic consumption based sectors.

Projection of GDP numbers for 2008-09 at 8.7 per cent has fuelled worries in the mind of market participants and there is likely to be a re rating of share price targets once the fourth quarter results for financial year 2007-08 are announced in April. “There is a feeling in the market that actual growth numbers could fall short of even this estimate,” said Sapan Patel, JNP Shares.

Story Saved