DALAL Street will need the God and the Government's blessings this week. A sudden dip in sentiment may reverse the market direction in the short run.
Count your chickens:Market did not catch avian influenza on Friday. It seemed an innocuous broad-based profit-booking spree. However, the technical analysts saw ominous signals.
For the first four days last week, the benchmark indices witnessed higher peaks and on the last session of the week, the Sensex and the Nifty came off the cliffs rather sharply.
In terms of net investments, the overseas funds threw up a balanced trend before Friday - moderately positive on two days and negative on Tuesday and Wednesday.
The mutual funds were also cautiously positive.
Interestingly, market strategy adopted by the frontrunners on Friday was instructive. Did the market movers have a premonition of a nasty surprise on Friday? There cannot be a definite answer.
Consider the tangible elements that should form a favourable sentiment. Crude was easy.
The pre-Budget discussions in media were positive on probable macro economic steps and their salubrious effects on the corporate sector.
Most importantly, the quantum of money-in-the-waiting did not indicate any serious withdrawal. Neither the strong interest in the Indian equities waned.
In January, the local mutual funds are estimated to have collected around Rs 8,000 crore mostly through diversified funds.
The fund managers have so far largely restrained themselves from deploying this fresh money. On the other hand, there was no abnormal pressure for redemption.
The overseas funds also appear to have tempered their inclination for chasing local stocks. Investor demand for emerging market equity funds has never been so strong as this fund group posted all-time record inflows in the week ending February 8, according to the leading global monitor Emerging Portfolio Fund Research.
Thus the apparent slowdown can be explained away as a breather after a long bull race.
However, an undercurrent of nervousness could be deciphered if one gives credence to the market intelligence that a section of functionaries in the Government is toying with the idea of bringing back the long forgotten estate duty and reintroduction of long-term capital gains tax.
Flying object:Nothing is official. Going by the economic vision of the Prime Minister and Finance Minister, such a retrograde step is almost unthinkable.
But the stock market's vulnerability to rumour infection is well known.
On top of this, the bird flu reports are likely to increase the market worries in the near term.
If the damage control is quick and reassuring enough, then of course the market may not take much time to return to normal.
Otherwise, bears may have a long-awaited hug.