Market To Remain Volatile

The Indian markets may remain volatile as Investors await some of the positive steps which could be taken by the new finance minister P Chidambaram. Further the WPI Inflation which is expected on Tuesday (14th August 2012) would again be considered as crucial for the markets. Also one should note that the market would be remained closed on Wednesday (15th August 2012) on account of Independence Day a public holiday. Further any vital news from global could take market on either side.

Markets on Friday closed marginally lower in the red zone with the broader Indices closing lower 0.02 per cent. This is after; State bank of India (SBI) disappointed the streets with its June quarter numbers. The profit saw a growth of 137 per cent to Rs 1583 crore, however this was ignored by the markets as asset quality which is one of the key parameters to gauge the bank’s performance worsened further. It Net NPA increased by 40 basis points to 2.22 per cent on a sequential basis.

US markets on Friday closed higher in the range of 0.10 to 0.32 per cent after the media reports which said that The U.S. is still expanding, but at a lukewarm pace that’s unlikely to heat up before the end of the year. European markets also ended lower, with major Indices like FTSE, CAC and DAX like 0.10 and 0.61 per cent ended lower after Investors are worried about the worsening economic scenario of the Euro zone, and meanwhile European Central Bank (ECB) has also remained quiet not taking any major steps to boost the Euro economic growth.

Asian markets also ended lower on Friday with Indices like Hang Seng, Shanghai and Nikkei closed lower Hong Kong’s government cut its estimate for the city’s expansion this year after the economy grew at close to the slowest pace since the financial crisis amid waning export demand from advanced nations. The trade-reliant economy risks further deterioration this quarter after China reported a slump in July export growth to 1 percent.

The rupee is still above the comfort levels against the dollar. It is currently trading at Rs 55.344 against a dollar. Brent crude has moved up smartly and is trading at USD 113.24 per barrel which should be considered as high and above the comfort zone. Rising crude prices coupled with Rupee depreciation would worsen the fiscal situation which would affect the Indian economy.

In conclusion we believe the market will remain volatile and we advise our readers to plat with cautious.