Volatility may prevail on bourses

The market is expected to remain volatile next week due to uncertainties over elections results in five states due on Tuesday, 6 March 2012. The stock market remains closed on Thursday, 8 March 2012, on account of Holi.

The Bombay Stock Exchange (BSE) and the National Stock Exchange are holding a special 1-1/2 hour trading session on Saturday, 3 March 2012, as BSE is testing its Disaster Recover Site (DR). Trading will begin at 11:15 IST and conclude at 12:45 IST on that day.

Polling for assembly elections in five states concludes on Saturday, 3 March 2012. The counting of the votes takes place on 6 March 2012, with the results due on the same day.



Investors will closely watch movement in crude oil prices. A steep rise in crude oil price could derail global economic recovery and increase inflationary pressure. India imports two-thirds of its oil consumption, so an increase in oil prices will hurt its fiscal balance substantially. Oil has advanced this year amid concern that sanctions against Iran's nuclear program will disrupt crude supplies from the second-biggest producer in the Organization of Petroleum-Exporting Countries. Iran has threatened to shut the Strait of Hormuz, a transit route for a fifth of the world's oil, in response to an embargo.

Investors may avoid taking fresh positions ahead of the Union Budget and the Reserve Bank of India's (RBI)'s policy review, both due in mid-March 2012. The Reserve Bank of India (RBI) is slated to announce the mid-quarter policy review on 15 March 2012, a day before the presentation of the Union Budget 2012/13. At third-quarter policy review in January 2012, RBI had announced a cut of 50 basis points in the cash reserve ratio (CRR), citing tight liquidity pressures.

Finance Minister Pranab Mukherjee will present the annual budget for 2012/13 on 16 March 2012, while the railways budget will be presented on 14 March 2012. The budget session of parliament will start on 12 March 2012. The government will present on 15 March the Economic Survey for 2011/12, a document on the state of economy prepared by the economic division in the ministry of finance.

The annual budget is usually presented on the last working day of February. However, the budget has been delayed this time due to the ongoing assembly polls.