It seems that the prophets of doom have taken a break as Nifty has made a sharp comeback in last two weeks. The run up has been fast and furious and a lot of shorts are being forced to run for cover. Recovery in oil prices has provided the much needed relief for global equity markets.
Back home, market participants have somehow managed to ignore weakening Indian currency, not so pleasing quarterly earnings season by India Inc. and have marched ahead conquering the 7500 mark.
But the market has to content with the fact that some pressure could be witnessed given the precarious situation; both national and international. It would be prudent to apply some caution and use recent gains to reshuffle portfolio. Next week's tone will be set by outcome of RBI meet. It is unlikely that RBI will cut rate in the next policy since inflation has moved broad in-line with its trajectory. Had inflation undershot then there would have been a case to consider a rate cut. However, come April as the banking system moves to marginal cost of funds based lending rate determination, interest rate in general will start coming down and pending transmission of policy rate reduction will get complete.
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