Expect global markets to set the course in India (1) March 23, 2009
Posted by dhirendra08 in Broad Coalition, Broad;y decode, Share Drop, Weak Economic Growth.Tags: Brokers, Coalition, Corporate Earnings, Economic Growth, Extreme Outcome, Global Market, Indian Markets, Market Participants, Mood, Outcome, Shuffle Position, Trend, Volatility
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Good morning friends. With reference to The Economic Times the market appears to be pricing in a wide union government by one of the two large national parties. It is likely to react more violently.
The mood in global markets will broadly decide the trend in Indian markets for most of this week, brokers said. Market participants expect volatility to heighten over the week, as traders would shuffle positions in futures and options ahead of the expiry of March series contracts on Thursday.
A lot of positions would be initiated, keeping in mind the general elections over April and May and also the January-March corporate earnings. While a sharp drop in companies’ earnings is more or less expected this quarter, reflecting the weakening economic growth, the outcome of the general elections is considered more critical to determine the market direction in the foreseeable future.
“From our conversations with clients, the market appears to be pricing in a broad coalition government led by one of the two large national parties (Congress or BJP),” “The market is, therefore, likely to react more violently if we get one of the three extreme outcomes (a relatively narrow coalition), or a third front government, or a government with the Left parties supporting it.”
