New Delhi: After Reserve Bank of India (RBI) monetary policy and Union Budget failed to enthuse stock markets last week, investors will now look for cues from international events and foreign inflows, say experts.
“Bourses are expected to open marginally lower on Monday and will take cues from the global markets going forward,” Unicon Financial Services CEO Gajendra Nagpal said.
Analysts said the mood has turned bearish for now and the next big domestic trigger will be the Reserve Bank’s policy review in April. Last week, it did not lower key lending rates, prolonging the high interest rate regime in the face of high inflation.
Rakesh Goel, senior VP at Bonanza Portfolio said, “Short term trend has definitely turned bearish as of now and more downside cannot be ruled out. Some support can be seen near 5,270-5,260 levels in the NSE and technical recovery can be expected from these levels.”
The BSE 30-scrip benchmark Sensex ended in the negative terrain for the fourth straight week as investors remained unimpressed by the Budget 2012-13 proposals, which aim to mop up excise/service taxes that will raise prices and add to inflationary pressures.
Investors were also disappointed as the Budget was muted on most of the key factors like reforms and FDI.
Markets were expecting a clear picture on issues such as foreign direct investment (FDI) in retail and aviation sector, but these were not touched upon.
While some analysts termed it as realistic and positive for capital markets, others expressed concerns over the lack of fiscal consolidation road-map.
“For the stocks markets, there is some benefit in terms of a partial reduction of securities transaction tax (STT) on cash market transactions. We expect the markets to remain range-bound in the medium term,” Kotak Securities head of research Dipen Shah said.
Pradeep Gokhale, head-research, Tata Asset Management said, “The Budget has positives for the infrastructure, agriculture and the capital market.
“Indian market is still being influenced by global liquidity, and that would remain the predominant short term force in the market.”
Globally, the US stock markets had closed mostly flat on Friday.