Macros are not in great shape now

CNBC-TV18s Executive Editor, Udayan Mukherjee - There is a lot of sparing going on in New Delhi on what they want to do and what they can get away with. The problem is now political proportions. So the market has now two worries on its back; one is what happens to inflation if oil prices go up maybe moderately if not significantly. Yesterday we heard Morgan Stanley talking about inflation going up to 10% if the oil price hike comes through in the next 4 weeks and that is very disturbing.
 
One has seen what has happened to our trade deficit; our macros are not in great shape right now. Our current account and trade deficits are completely out of control and this oil price hike will fuel inflation and the market is seriously worried about that. To compound that agony and that worry, now there is a political flash point at the center where the Left parties do not see eye to eye and yesterday one of the small members of the Left party pulling out of the alliance meeting or the coordination meeting for Oil.
 
All of that is making the market doubly nervous that are we looking at some political uncertainty on top of inflation uncertainty because of the oil situation. So it’s not an easy place to be in. One can understand why the market sold off yesterday. I only hope that we will go through this without further damage to sentiment because of any kind of political rhetoric that the market has to deal with.