All eyes on Chidambarm's Union Budget 2008-09 presentation!

Our markets have turned volatile on the last day of settlement of February series, as major roll over to march series completed by 27th itself, Nifty traded for most part of the day in negative territory, threatening to break the key support at 5DSMA placed 5227, on bear attack, however, as support emerged number of times around this level, huge short covering in the last half an hour, brought Nifty to touch 5302 level, and finally Settlement price 5285.10 was higher than January(5137.45), as predicted earlier.

US markets and Europen markets tanked overnight, and Asian markets are bleeding before our markets open for trading today and have an important event during the trading hours; Unon Budget presentation at 11 a.m. by FM in Parliament, which would last one hour, by which time, inflation data would be released for the week end, which might show further uptick! Crude oil crossing US $ 102 and trading firmly above 100 mark, and analysts predicting it to touch 150 in the days / months to come, is very sad news for regulators fighting inflation. While Railway Budget shown the indication of soft budget, in view of large number of states going to polls this year, and General Elections due any time after October' 2008, owing to the political developments in the country, some sops to cross sections of society and sectors to please voters cannot be ruled out.

Agricultural Loan write off which is being demanded very strongly from all quarters, including left parties, if considered is definitely populist measure, but severely affect the public sector banking system, is the reason why PSU banks shares are nervous a head of the presentation of budget. If one goes by the indications from Economic Survey presented, impetus on agriculture growth is a must to catch double digit growth of economy, in the 11th 5 year Plan, of which, this will be the first Union Budget which has to lay the foundation and road map to achieve 4 % growth in agriculture. The raise in food (agricultural products) prices along with other commodities might throw a big challenge to our country too, if proper steps are not taken now.

Markets will be volatile today with announcement of each and every item, and digestion of the proposals and their affect on various companies, sectors and economy will be known by monday. Today being the last day of February month, some NAV prop up by mutual funds also can be expected to protect the indices.
Singapore Nifty futures are trading at a discount of 200 point to spot nifty will suggest gap down opening of our markets.