The week ahead:awaiting an eventful week…

Supported by Good Q3 results and continued DII and FII investments, the markets recorded its longest winning streak, closing in green 8 weeks in a row. The Sensex closed at 36,050 while nifty closed at 11,069. However investors should be cautious since the stocks are now overvalued, especially the small and mid-cap stocks.

Going ahead, the market participants will be keen to hear the budget commentary and react accordingly. There is already a hint from the finance minister that agriculture is going to get more priority in this budget – with rising rural discontent; this could be the logical remedy to win back rural vote banks. There are many other events which might influence the markets – like the January auto sales numbers, outcome of Fed meeting and the US job data. A negative cue from any of these factors can trigger a correction in the benchmark indices. Overall, investors may tread cautiously as it is a very sensitive week.

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