This week will see the Nifty and the Sensex inching downwards.
The best case scenario for both indices is an upside of just over one per cent, which we feel has a one in a four chance of occurring.
However, a downside of two to three per cent is highly likely.
The last set of unaudited results will come on Monday. It is expected to be a mixed bag and in line with the street's expectations on sectors and companies.
The yield on 10 year G-Secs is expected to be range bound between 8.5 per cent and 8.8 per cent levels.
This is due to an uninterrupted supply of G-Secs on one hand and redemption of Rs 33,000 crore coming up on the other.
The street has factored in a diesel price hike of Rs three and four per litre and a petrol price hike of Rs five per litre as inevitable.
Marketmen anticipate the rupee to weaken against the dollar. It could however surprise by appreciating just in excess of one per cent over last week's close.
IMF Forecast
The International Monetary Fund has forecast a GDP growth of 6.9 per cent in calendar 2012, 10 basis points less than its assessment done last January.
It is interesting to note that credit rating agencies are not sparing any chances of expressing their opinion on sovereigns and instruments.
Though this may help them as “seen working” by the whole world (unlike in 2008), there are still cases of countries closer to bailout being rated far higher than emerging economies which have a parallel economy that is not fully accounted for in their GDP numbers.
Data from the US has neither been good nor bad. The chances of a QE3 are remote as there is cognisable growth.
Benchmark US treasury yields are likely to remain range bound between 1.90 per cent and 2.20 per cent levels albeit on the side of the outer limit.
The European Central Bank is expected to stay put on interest rates at one per cent this week.
Currency traders might be neutral on the Euro this week but it might surprise by breaching 1.3300 US$ levels to a Euro up over its last week's close of 1.3250 US$ to a Euro.
Gold might breach $1700 to an ounce levels while Nymex crude oil futures are expected to be around $108 levels to a barrel. Finally the World Bank said that global food prices have increased eight per cent in the last four months from December 2011 to March 2012.
Current food prices are not far from the June 2008 and February 2011 global food price index peaks stressing the need to remain vigilant, it said.
The Bank listed increasing crude prices, adverse weather conditions, Asia's strong import demand and Euro zone's persisting financial crisis as reasons.
The World Bank is developing a monitoring framework that defines, identifies and monitors food price crises both at the global and national levels.