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Benchmark indices are seen trading with a positive bias next week as the government cleared some ambiguity relating to the tax residency certificate issue. The government said the certificate is conclusive proof to seek benefits under the double taxation avoidance agreement. However, market participants do not rule out bouts of selling at higher levels as the uncertainty over the tax issue is not completely out. Also, the global picture is murky as investors are staring at automatic budget cuts coming into effect in the US from yesterday due to political logjam over averting the same. In the US, automatic cuts in spending amounting to $85 bln, known as sequestration, are scheduled to take effect yesterday if lawmakers fail to reach a deal. The political deadlock in Italy is also haunting investors globally. These uncertainties are likely to prompt them to trade stock-specific.
Back home, worries over the government's ability to implement measures laid down in the Union Budget for 2013-14 (Apr-Mar) may also restrict any upside in indices. The concern is whether the proposed budget will be able to gain approval in Parliament. Opposition parties as well as allies have criticised the budget, saying it does little to boost growth. Therefore, upside in the National Stock Exchange's 50-share Nifty may be capped at 5780-5800. Some see the possibility of the index testing 5850 points. Yesterday, the Nifty closed at 5719.70, up 26.65 points, or 0.5%. The S&P BSE's 30-stock Sensex ended at 18918.52, up 56.98 points or 0.3%. Selling pressure may continue in Reliance Industries as the stock looks technically weak.
Benchmark indices are seen trading with a positive bias next week as the government cleared some ambiguity relating to the tax residency certificate issue. The government said the certificate is conclusive proof to seek benefits under the double taxation avoidance agreement. However, market participants do not rule out bouts of selling at higher levels as the uncertainty over the tax issue is not completely out. Also, the global picture is murky as investors are staring at automatic budget cuts coming into effect in the US from yesterday due to political logjam over averting the same. In the US, automatic cuts in spending amounting to $85 bln, known as sequestration, are scheduled to take effect yesterday if lawmakers fail to reach a deal. The political deadlock in Italy is also haunting investors globally. These uncertainties are likely to prompt them to trade stock-specific.
Back home, worries over the government's ability to implement measures laid down in the Union Budget for 2013-14 (Apr-Mar) may also restrict any upside in indices. The concern is whether the proposed budget will be able to gain approval in Parliament. Opposition parties as well as allies have criticised the budget, saying it does little to boost growth. Therefore, upside in the National Stock Exchange's 50-share Nifty may be capped at 5780-5800. Some see the possibility of the index testing 5850 points. Yesterday, the Nifty closed at 5719.70, up 26.65 points, or 0.5%. The S&P BSE's 30-stock Sensex ended at 18918.52, up 56.98 points or 0.3%. Selling pressure may continue in Reliance Industries as the stock looks technically weak.
