Shock and Fear… limited impact on India

Courage, in the final analysis, is nothing but an affirmative answer to the shocks of existence.- Kurt Goldstein.

Japan has been rattled by a natural calamity of monumental proportion. Expectedly, Japanese shares have taken a severe beating despite the BOJ injecting $86bn to stabilize markets. After the double whammy of quake and Tsunami, Japan is now staring at a potential nuclear disaster. But, other Asian markets have managed to avert a steep fall as did the US markets.

Oil prices have softened, with Nymex futures below $100 a barrel. Brent is still hovering around $112. Meanwhile, the political turmoil in the Middle-East continues amid a call by the Arab League for a no-fly zone over Libya and Yemen.

We expect a nervous start but no major cuts are in the offing. Apart from the offshore cues, markets will focus on the February inflation data (to be released today). It is likely to slip below 8%. The RBI will meet on March 17. Before that the Fed will take up a review on Tuesday.

The Indian market will continue to be rangebound; the is the key indices are still trading below 200-DMA. Only a breakout above 5650 will bring some semblance of order. The broader trading range for the Nifty appears to be between 5300 and 5700.

FIIs were net sellers of Rs 2.44bn in the cash segment on Friday, according to the provisional NSE data. The domestic institutional investors (DIIs) were net buyers at Rs 1.12bn on the same day. FIIs were net buyers of Rs 5.44bn in the F&O segment.

The foreign funds were net sellers at Rs 371mn in the cash segment on Thursday, as per final SEBI data. Mutual Funds were net buyers of Rs 512mn in the cash segment on the same day.