The market had to be cautious about the implications of falling commodity prices, since 56 percent of Nifty earnings was now dollar denominate, Mishra cautioned.
The report pointed out that in February, fiscal discipline continued, vote-on-account desisted from populism and diesel prices hiked despite concerns to contrary. In the interim Budget, the Government commendably desisted from populist measures (like farm loan waiver in an election year), endorsing commitment to fiscal consolidation.
Bharat Iyer of JPMorgan feels the current political environment puts a question mark on market's reform expectations being met, the global environment remains challenging too.
Dan Morris of JPMorgan AMC expects moderately positive returns for global equities in 2012. He also expects the US to continue to outperform other developed markets
Abhay Laijawala of Deutsche Securities expects investors to stay nervous till the rupee shows some signs of stability.
Fund managers' survey over the last one week reveals that most expect negative returns for global equity markets and hold a cautious view on India, says Mahesh Nadurkar of CLSA
Standard Chartered IDR (Indian Depositiary receipts) - only listed IDR on Indian stock exchanges - have seen heavy sell-off on Monday due to no arbitrage opportunity. A share closed down 17.53% at Rs 94.55.
Higher crude prices are largely priced in, but given India's sensitivity to oil prices, the market is likely to stay nervous given the risk of Middle East tensions escalating further.
While we remain convinced about the long-term India investment story, the market is set to face a gale of headwinds in the short-term, says Abhay Laijawala of Deutsche Securities.