Indian market to remain rudderless
Monday, 2 March 2009
MUMBAI, Mar 1 (Internet): Stepping into March, the Indian stock market is expected to remain directionless; the only positive trigger when the Reserve Bank of India acts to cut rates as early as this weekend.
The country's economy grew at its slowest pace in nearly six years in the third quarter as the Asian giant began to feel the full brunt of the deepening global downturn. The worse-than-expected 5.30 per cent expansion in the three months to December, down from 8.90 per cent a year earlier, spurred expectations the central bank will cut interest rates further to boost the flagging economy.
"The depressing growth data will put pressure on the central bank to be more aggressive in rate cuts; they had talked about a downside risk to growth and now we have it," said independent analyst Dharmesh Jaiswal.
The central bank has already reduced its repo rate by 350 basis points to 5.50 per cent since October while the government has introduced three stimulus packages in three months to stimulate the economy.
Earlier this week, the government cut excise duties to 8.0 per cent from 10 per cent and lowered the service tax to 10 per cent from 12 per cent. It also prolonged a cut in value-added tax announced last December.
However, Ambareesh Baliga, head of research at Karvy Stock Broking doesn't see too much of a downside for the markets from here because markets have seen resilience inspite of international markets performing quite badly.
"We have been able to hold on at those lower levels of 2,700 and every time markets have bounced back from there. So I don't think we will see much lower levels from the current levels."
According to him, there are no huge positive triggers for the market to breakout of this range. Therefore, markets will be in the range of around 2700-3000 at least till the elections in the absence of any major positive or negative triggers.
Bombay Stock Exchange's Sensex ended the week on a flat note at 8891.61, up 48.40 points or 0.55 per cent from a week ago. National Stock Exchange's Nifty closed at 2763.65, up 27.2 points or 0.99 per cent from week ended February 20.
On a stock specific note, shares of Reliance Industries will be in focus after the firm said its board will meet on March 2 to consider and recommend the amalgamation of its unit Reliance Petroleum with itself.
The country's economy grew at its slowest pace in nearly six years in the third quarter as the Asian giant began to feel the full brunt of the deepening global downturn. The worse-than-expected 5.30 per cent expansion in the three months to December, down from 8.90 per cent a year earlier, spurred expectations the central bank will cut interest rates further to boost the flagging economy.
"The depressing growth data will put pressure on the central bank to be more aggressive in rate cuts; they had talked about a downside risk to growth and now we have it," said independent analyst Dharmesh Jaiswal.
The central bank has already reduced its repo rate by 350 basis points to 5.50 per cent since October while the government has introduced three stimulus packages in three months to stimulate the economy.
Earlier this week, the government cut excise duties to 8.0 per cent from 10 per cent and lowered the service tax to 10 per cent from 12 per cent. It also prolonged a cut in value-added tax announced last December.
However, Ambareesh Baliga, head of research at Karvy Stock Broking doesn't see too much of a downside for the markets from here because markets have seen resilience inspite of international markets performing quite badly.
"We have been able to hold on at those lower levels of 2,700 and every time markets have bounced back from there. So I don't think we will see much lower levels from the current levels."
According to him, there are no huge positive triggers for the market to breakout of this range. Therefore, markets will be in the range of around 2700-3000 at least till the elections in the absence of any major positive or negative triggers.
Bombay Stock Exchange's Sensex ended the week on a flat note at 8891.61, up 48.40 points or 0.55 per cent from a week ago. National Stock Exchange's Nifty closed at 2763.65, up 27.2 points or 0.99 per cent from week ended February 20.
On a stock specific note, shares of Reliance Industries will be in focus after the firm said its board will meet on March 2 to consider and recommend the amalgamation of its unit Reliance Petroleum with itself.