MUMBAI: Amidst the growing debate over the sustainability of the current rally, ICICI Securities has asserted that at this is point in time it would be too premature to say – “the worst is over”. It would be too early to conclude that the rally is the threshold to a probable recovery.

What actually has happened is that the pace of bad global economic news has decelerated sharply in the last quarter and we are seeing some light at the end of the tunnel. Hence, the raft of economic bad news has almost hit the bottom. However, how long it will consolidate at the bottom before taking a positive turn is a question of time, states a report by ICICI Securities.

Considering election as a short-term trigger in Indian equities, ICICI Securities mentions, any favourable outcome may extend the current rally while any adverse outcome may cap the gains leading to a correction. However, the markets will consolidate.

Taking a call on a mutually exclusive event is quite achievable rather than taking a call on an event in which one does not know how many members will make the event mutually exclusive.

“The same applies to the outcome of the general elections this time around where we may see a big surprise in the form of a third front forming a government at the centre after May 16 2009 apart from normal contenders like the UPA and the NDA,” says Anup Bagchi, executive director, ICICI Securities.

However, ICICI Securities is apprehensive of the stability of the new government

source: Eocnomic times

Tags: bse, future, icici, nifty, nse, sensex

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