Snapping five straight session of decline the Sensex has gained over 400 points on Wednesday but investors are still cautious over the future prospects.
While technical analysts are claiming that low level or bargain buying is responsible for the rally, other market experts are in the opinion that fundamentals are still same and there will be no major change in this in near term. In their favour they count the figures of industrial production, rising crude oil prices, inflation and fears of further interest rates hike.
They maintain that the current rally also got support from easing crude oil prices but believe this ease in oil prices is only a short term correction but in medium to long term it will remain in range of $120-140 due to ongoing geo political unrest in middle east and African countries and that will be sufficient for igniting inflation and making extra pressure on current account deficit.
Fears of further interest rates hike by European central bank will also add further pressure on dollar index which will make crude oil dearer, they add. Ongoing probe in connection with 2G spectrum allocation and an alleged involvement of industries are still a worrisome factor for the sentiment and may continue in the near term.
But some analysts opined that markets have been emerged out from the phase of negative sentiment and will regain momentum in near to medium term. In their view shift of FIIs from developed economies like Japan and others toward India coupled with record food grain output estimates and continuous decline in inflation will more or less discount the pressure of decline in industrial production data and fears of further interest rates hike by Reserve Bank of India in its annul monetary policy in May.
But in my opinion traders and investors should remain cautious in the near term as the current rally is only driven by foreign institutional investors in the wake of earthquake and tsunami in Japan but improved economic indicators in US will remain better choice for these investors. So a level of 18500 will be proper on which an investor can enter in the market. For more information about sensex live please visit Zeebiz.com
While technical analysts are claiming that low level or bargain buying is responsible for the rally, other market experts are in the opinion that fundamentals are still same and there will be no major change in this in near term. In their favour they count the figures of industrial production, rising crude oil prices, inflation and fears of further interest rates hike.
They maintain that the current rally also got support from easing crude oil prices but believe this ease in oil prices is only a short term correction but in medium to long term it will remain in range of $120-140 due to ongoing geo political unrest in middle east and African countries and that will be sufficient for igniting inflation and making extra pressure on current account deficit.
Fears of further interest rates hike by European central bank will also add further pressure on dollar index which will make crude oil dearer, they add. Ongoing probe in connection with 2G spectrum allocation and an alleged involvement of industries are still a worrisome factor for the sentiment and may continue in the near term.
But some analysts opined that markets have been emerged out from the phase of negative sentiment and will regain momentum in near to medium term. In their view shift of FIIs from developed economies like Japan and others toward India coupled with record food grain output estimates and continuous decline in inflation will more or less discount the pressure of decline in industrial production data and fears of further interest rates hike by Reserve Bank of India in its annul monetary policy in May.
But in my opinion traders and investors should remain cautious in the near term as the current rally is only driven by foreign institutional investors in the wake of earthquake and tsunami in Japan but improved economic indicators in US will remain better choice for these investors. So a level of 18500 will be proper on which an investor can enter in the market. For more information about sensex live please visit Zeebiz.com
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