RBI announced another hike in CRR along with an increased REPO rate and reduced interest payment on CRR balance. Inflation number has got stagnant at 6.46% level for last two weeks and no visible indication of it’s going down. Harvest season is almost at the door. Global production of food crop is not satisfactory and occurrence of speculative hoarding is pretty high.
On the other side, market sentiment is not exceptionally strong. In last few days volume was high when market was in positive territory, that might force people to think that sentiment has got back its strength, but actually most of the strength was rollover backed. Even, magnitude of rollover is poor this time compared to past experiences. People are just too averse to take risk. No direct indication of follow through buying.
From second week 2006-07 results will start coming in. Appreciating rupee continuously shadowing the prospect of IT sector. Recent monetary tightening will hit banking companies hard. Due to increased cost of raw material, steel producers are increasing steel price and that can be a positive factor in the market.
Tomorrow market will often at down side only, if everything remains same. And if market fails to sustain couple of hundreds points down side then we can expect some down slide. After that Infosys will publish 4th quarter result on 10th April, any below the expectation number can set the fire. Though, it’s also true that some real good number from Infosys and other companies can change the course overnight.
I beg your pardon for my pessimism, but I am seeing no sure reason to get engaged in festivity. Best of luck.
