C-rude shock indeed

"Blame someone else and get on with your life"- Alan Woods.

Just when the sentiment on the Indian bourses was improving we have been hit hard by a swift and a steep spike in crude oil amid worsening Middle-East turmoil. The crude shock has triggered fears of further uptick in inflation and interest rates. A bloated oil import bill also hits India’s external balance sheet and fiscal health.



On Thursday, it almost seemed like the expiry of optimism with the key indices taking a huge pounding. But, we are likely to see a better opening as crude has cooled off slightly and there hasn’t been any fresh selloff in global equities. We might see a positive end to a tumultuous week, provided there are no further nasty surprises.

At least for the day and for a few more days, investors will have to pay close attention to the Railway Budget, Economic Survey and the Union Budget. Let's hope the Railway Minister’s proposals for FY12 will keep things on track for the local bourses.

Volatility will remain high in the next couple of sessions given the event risk involved. The overall undertone may continue to be a little nervous, and so one needs to be very watchful in the before jumping the gun. The undertone remains fragile and so one has no option to wait for a trend reversal to take hold. We expect the downward pressure to prevail. The Nifty may even re-test its intermediate low of 5177 in the coming days.