Markets To Be Dodgy Pre-Budget

The Indian markets are expected to remain in an uncertain directional state this week as the budget session of the parliament starts from Thursday, February 21. Expectations, speculation and assumption are expected to create a jumble of trends in the markets that ultimately leads to no determined directional movement. Jittery trading sessions are expected to continue till substantial developments start panning out. Markets seem to be hoping for achievability in the budget and if the Finance Minister is able to deliver plans accordingly, the markets may see a revival of the upward trend. However, till then, and for today, markets are expected to be dodgy.

The government has been making additional efforts towards curbing the fiscal deficit. The much-talked-about number has been under the scanner for a while now. Although the street has been getting extensively worried and cautious over where the fiscal deficit for FY13 is headed, the government has been repeatedly confident about it being below 5.3%. After a series of steps from PSU divestments to telecom spectrum auctions, the government has made visible attempts at taming the deficit. It has now been reported that the government has cut borrowing by Rs 12000 crore for the week February 22 considering a fiscal consolidation viewpoint to stick to deficit targets.

For the week, the markets are highly likely to focus on government actions and measures. The budget is definitely the centre of attention and any development on the macroeconomic front is likely to be influential on the market direction. Volatility is expected to be high in the coming weeks and investors must remain cautious of movement in the markets.

For today, markets are expected to see a soft opening due to a lack of appreciation-inducing factors. Moreover, Asian markets too have seen a tepid opening today. Following the drama around the G20 meeting and holiday in the US (on account of Washington’s Birthday), Asian markets have opened in the range of 0.06% and 0.68%. The SGX Nifty was seen trading higher by 8.50 points at around 07:30 AM earlier today.