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Thursday, July 28, 2011

2nd August 2011

All eyes on President Obama as time draws a curtain on the debt row in the USA.Will the limits be enhanced and the bickering settled or will political vendetta let the country get into a quasi default situation.The commodity cycle will turn negative and the looming rating downgrade from AAA to AA,an unthinkable idea for the US.

The potential of a situation worse than the Lehmann Bros crisis cannot be ruled out.Similarly if the issue is settled it will signify some more financial easing and a flood of fresh money in world markets.Commodities will get new legs.

So 2nd Aug will decide trend for global markets,once India  and the FIIs  adjust to the rate hikes and the Monsoon being near normal the macro factors will turn slightly positive at least for the Indian equity markets.