Worried Wednesday in store

Nothing will ever be attempted, if all possible objections must be first overcome. -Samuel Johnson.

With risk appetite on the wane, investors are not really attempting to take any chances. Flight-to-safety seems to be the order of the day but the political strife in West Asia does not really make any place safe. Even as the pro-democracy wave rages, investors are now wondering what next after Libya?



Back to our bourses. The start today is set to be down but given the resilience being exhibited by some Asian markets, we could hope for some rebound later. The F&O expiry, geopolitical concerns and the Budget will ensure that caution reigns supreme. We expect the Nifty to perhaps retest the 5330 levels in the short term.

Airlines and oil & gas companies will be in focus due to the spike in crude. There is also talk of another fuel price hike but that will take some weeks at least.

ABB, Alfa Laval, Bata India, Gujarat Pipavav and SKF India will announce their results today.

Ranbaxy will be in focus after its Q4 results. Jindal Stainless is planning to buy the ailing Shah Alloys while Sun Pharma is mulling a merger of its US subsidiary Caraco Pharma with self. Cement companies in the Western part of India could hike prices.

FIIs were net sellers of Rs 3.86bn in the cash segment on Tuesday, according to the provisional NSE data. The domestic institutional institutions were net buyers at Rs 4.14bn on the same day. FIIs were net sellers of Rs 19.68bn in the F&O segment. The foreign funds were net sellers at Rs 387mn in the cash segment on Monday, as per final SEBI data. Mutual Funds were net sellers of Rs 1.69bn on the same day.

The political unrest underway in several parts of the so-called Arab world has sent global markets into a tizzy. Oil prices are at 28-month peak; gold at 7-week high. US Treasuries gained while the VIX jumped a whopping 28%.

There might be further oil price volatility, and perhaps even a minor oil shock. For India, which relies mostly on imports, it is a major blow. Petrol prices have been hiked several times since last June, although diesel has been left untouched.

Wall Street's key volatility measure spiked nearly 28% on Tuesday, as investors fret about the deteriorating situation in Libya. The CBOE volatility index (VIX), rose 27.8% to 20.99 in late afternoon trading. The index has jumped more than 31% in five days and is now trading at its highest level since late November.

But the fear level is still below 30 - considered the benchmark sign of investor worry. Year to date, the index is up only about 18%. The rise in the VIX comes amid a sharp stock sell off, with the Dow falling as much as 120 points.

The US dollar regained a slight advance against major currencies, after pulling back following comments from a European official that raised prospects for an interest-rate hike by the European Central Bank.