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Straight from the Specialists

India Markets Weekahead: Prudent to wait for the budget

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(Any opinions expressed here are those of the author, and not necessarily of Thomson Reuters)

After showing promise early in the week, the markets turned gloomy on Thursday with a sharp correction, ending the week with a 0.63 percent fall at 5850 – close to the support levels of 5840 which hasn’t been violated on a closing basis.

FII buying dipped considerably during the week, estimated at about $90 million. Worries that U.S. Federal Reserve may taper off bond buying led to a crack in the world markets on Thursday, and the Nifty fell 91 points, with most of the mid-caps breaking recent lows. The only silver lining was lower-than-average volumes, thus some buying support on Friday saw the markets holding steady.

The much-awaited banking license guidelines were announced by the Reserve Bank of India on Friday. On the face of it, it seems anybody having a 10-year track record and ability to come up with 5 billion rupees in equity capital can set up a bank. But with the RBI having sole discretion on approvals, very few unblemished names from “acceptable” sectors will be able to pass muster.

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