“High volatility is in store for stock markets in the coming days. Globally inflation is becoming a worse-than-expected threat and this is reflected in the sharp spike in US 10-year yield to a 2-year high of 1.89%.
The consequent correction in US markets has been sharp with Nasdaq falling by 2.6%. The Russian troop buildup on the Ukraine border and the probability of a Russian invasion of Ukraine are emerging as a major geopolitical issue that can impact markets. For India, the sharp spike in crude is posing major threats to inflation and fiscal and current account balances. On the positive side, the Q3 results indicate a smart pick up in earnings.
While this strong fundamental can support the market, investors have to be cautious since at the present high valuations negative triggers can derail the rally,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
