Expect global markets to set the course in India (2) March 23, 2009
Posted by dhirendra1972 in Close Watch, Eroding.Tags: Analysts, Economy, Gains, Indices, Investors, Sustainable
add a comment
Benchmark indices gained 2.4% last week, after rising 5.2% in the previous week, posting their best positive streaks so far in 2009. Analysts believe that recent gains are not sustainable as the rally has not been driven by improvement in the economy.
“Given the uncertainty ahead, we believe the current rally is not sustainable and the market would be capped with Nifty at 2800 levels,” Alchemy Share & Stockbrokers said in a report. “The weak macro picture holds grip over the market at least for another three months till the new government is in place. The negative GDP surprise, worsening fiscal situation and election uncertainty would continue to drag the market in the near term.”
Several market participants echo Alchemy’s market outlook and their views have been reinforced by the significant presence of short positions around the 2850-2900-level on the Nifty. On Friday, the Nifty closed at 2807.
This week, investors globally will closely watch two key US economic data announcements, including gross domestic product (GDP) for the fourth quarter and housing sales numbers in February. US GDP is estimated to contract by roughly 6.2% in the quarter. On Friday, US indices fell 1-2%, eroding most of the last week’s gains there.
