The Good, the bad and the ugly

"Bad news travels fast." - American Proverb. While the start may be higher the ratio of good news to bad news is skewed towards the latter. Risky assets are still maintaining some of this year’s gains, but market players are looking for incremental good news. The Budget hasn’t been able to perk up the mood. If anything, some of the ugly proposals such as the GAAR provisions have spooked the markets. Mind you, we haven't heard or read the last word on this controversial issue as yet. The FM’s attempt at fiscal consolidation has not evoked a favourable response either. Bond yields have actually climbed and a rate cut on April 17 is not a certainty now. The rupee is once again feeling the heat from rising twin deficits, moderating FII inflows and high crude oil prices. Even the US, which looked well on track for decent growth, is showing some chinks. The eurozone debt crisis is also lurking in the background. The S&P has warned that Greece may need another debt recast even as Spain grapples with a nationwide protests against austerity measures. Yields on Italian and Spanish bonds have jumped. A meaningful uptick from here is ruled out at the moment. At the same time, there might be some more downside left. A stock centric and measured approach seems to be the best bet for the time being. The Nifty remained under pressure on Thursday. After opening lower and violating the support of 200 DMA (~5150) on intraday basis, the index finally closed below 5200 levels. We maintain our negative bias for the near term as long as the Nifty trades below 5230 levels. Trend in FII flows: The FIIs were net sellers of Rs 13.32bn in the cash segment on Thursday while the domestic institutional investors (DIIs) were net buyers of ~Rs 3bn, as per the provisional figures released by the NSE. The FIIs were net buyers of Rs 26.4bn in the F&O segment on Thursday, according to the provisional NSE data. The foreign funds were net buyers at Rs 2.49bn in the cash segment on Wednesday, according to the SEBI figures. Mutual Funds were net sellers of Rs 553mn on the same day. Global Data Watch today: Japan housing starts, Japan construction orders, Germany retail sales, Eurozone consumer price index, Canada's GDP growth, US personal income and consumer spending, Chicago Purchasing Managers' Index (Mar) and Reuters/Michigan Consumer Sentiment Index (Mar).