Weekly Newsletter - March 25 2012

The win-loss score line for the Indian market now stands at 7 to 5. The strong momentum that one saw early in the year has clearly subsided now post the big events of March. It looks like market players are resigned to another grinding year ahead with no clear bias. At the same time, there is no dearth of headwinds at the moment. It will take a while for these uncertainties to abate.

As far as India is concerned the two big worries are sticky crude oil and persistent policy inertia at the Centre. Even the RBI is waiting for these two variables to sort of ease a wee bit before it starts slashing rates. Estimates of potential quantum of rate cuts by the RBI have been scaled back after the Budget.

All eyes are on the Government’s economic managers to see whether they are able to take the requisite decisions to pump-prime the domestic economy.

On the global front, market participants are increasingly worried about the situation in China even as concerns prevail over the sorry state of the eurozone.