According to Reliance Money’s report, markets are likely to stay ‘ranged’ between levels 2500-2800 of NIFTY, with element of ‘uncertainty’ playing a key role, till next regular Budget is presented by new government in June 2009.

Reliance Money’s report:

With the Interim Budget over, there are no near term triggers ahead for the markets. We expect the markets to remain range bound with the outcome of the oncoming Lok Sabha elections being keen watched by the markets ahead. Now that the general elections proggrame has been announced, markets are likely to succumb to uncertainty. This means broader markets are likely to stay ‘ranged’ between levels 2500-2800 of NIFTY, with element of ‘uncertainty’ playing a key role, till next regular Budget is presented by new government in June 2009.

We expect the Sensex to report an EPS of around Rs 850 for FY10, which based on a P/E band of 9-12x should see the Sensex move in the range of 7500-10200 over the next 12 months. Also corporate earnings numbers are also unlikely to get better atleast for the next 3-4 quarters and while a lot of that has been factored into prices, there could be negative surprises.

On the positive side in a best case scenario we expect markets to start looking up some time in October 09 when markets start discounting a improved Q3FY10 performance which will also be boosted by a lower base effect coming off from 2008 levels. With no macro triggers expected in the current quarter, we expect markets to take cues from global events.

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