Markets to be volatile ahead of Union Budget: Dilip Bang

By Dilip Bang of Nirmal Bang

The US House voted to temporarily extend the problem of the nation's borrowing limit till May. The bill would suspend the debt ceiling until May 19, allowing the government to issue new debt to pay bills. At the end of that period, the debt limit would be increased to reflect the new amount of total debt incurred by it.

The Bank of Japan (BoJ) eased its monetary policy by setting a 2% inflation target and agreeing to open-ended asset purchases, resulting in depreciation of the Yen and increasing liquidity, which is finding its way into emerging markets, including India. The recent rally in the Indian markets is mainly on account of increased FII flows into the country.

The earnings results of India Inc for the December quarter has been mixed. While some have met market expectations, others have not been that encouraging.

However, the Indian government recently decided to deregulate diesel prices, which will help improve the fiscal deficit situation in the country. Inflation numbers too are lower than the previous month.

The Indian markets are likely to be volatile due to the upcoming Union Budget. Market participants can look at buying on declines with the Nifty having support at the 5,980 level. If it breaks this level, then they should avoid buying in the markets.

Stocks like Zee Entertainment Enterprises, Sun TV Network, Tech Mahindra, IndiaBulls Financial Services, IndiaBulls Real Estate, Oil and Natural Gas Corporation, Hindustan Petroleum Corporation, IndusInd Bank and Aditya Birla Novo look good from investment as well as trading perspectives.

In the coming days, the markets can expect a slew of policy measures in view of the upcoming budget session, wherein the government is likely to take steps to control deficit in the current as well as the next year.

Source: Nirmal Bang's Beyond Market

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