Market - The Week goneby & The Week ahead

The Week Goneby!

With the result season coming to an end with still few more heavy weights are out to declare their FY12 results, the Sensex has posted its another week of bear battering and closed below the 200 dma. All major global indices are also trending southward journey, with exception on DJIA. Right from the time of budget, the market is more or less looking weak with the main concern being played out on the government’s aim to curb DTAA misuse to plug the tax loop hole. It’s highly attributable for the market to get jitters, while the FIIs are looking for the government action policy on the most controversial tax amendment GAAR, which is expected to be declared on May 7.

Fiscal deficit and Rupee Depreciation:

Even though the government is determined to control the already over shooting fiscal deficit, the counter affect of the same on Rupee Vs Dollar is very much playing rout in the market. With the rupee at an all time low of Rs.54 against the Greenback, the RBI is left with few options to curtail further downside on the rupee. As a first step, it has come with deregulation on interest rate on export credit by banks and also increasing the interest rate on FCN(R) deposits.

Glim Hope from Crude:

The glimmering hope for the market to rebound can be expected from the easing of crude price in the international market. On Friday, the crude slid by more than 4 per cent and closed at $98.49 which is new low after February. The persistent high crude price is one of the most important reasons for the fast depreciating rupee and this will be good news for the market for an intermittent period.

The Week Ahead

From technical aspect the market tested its 200 dma close after a 90 days period and it’s expected to remain muted or rebound in the coming weeks. It’s better to play safe as a side liner till the government declares its policy decision upon the GAAR.

So, what do you think guys? Which way the market will head according to you? Any relief expected??