Weekly Newsletter - Mar 6 2011

The Budget actually turned out to be a savior for the markets, at least for the week, with the key indices posting smart gains before finishing flat on Friday. At the moment, it is not clear whether the post-Budget rally will sustain or the market will soften a bit. either of the two scenarios could unfold. So, it would pay to stay cautious. The trend may be volatile and the indices will stay within a trading range. The Nifty is likely to trade between 5400 and 5650 in the short term.



Event wise, next week will be a little low key. IIP data for January is likely to show improvement from December. Among the other important domestic data points to watch out for in the coming days include: monthly inflation report (March 14) and the RBI mid-quarter review (March 17).

Globally, one should look out for economic reports on Japan's Q4 GDP, UK's industrial production, Bank of England's interest rate decision, US retail sales and US consumer sentiment.

How can one forget the ongoing turmoil in the Middle-East and North Africa. Geopolitical risk and its fallout on crude oil prices will continue to have a bearing on the sentiment across world markets. Also, the US jobs data will be analysed carefully to ascertain the state of the US economy, especially the weak labour market.