Contentment consists not in adding more fuel, but in taking away some fire. - Thomas Fuller
The steep hike in petrol prices has fuelled public outburst even as the move has sparked some hope on reforms. A petrol price hike is easier vis-à-vis other fuels. It remains to be seen whether the Government can do an encore as far as other fuels are concerned. That call is politically sensitive for UPA II, but given the elevated fuel subsidy bill it has little choice. What’s more, the Rupee’s sharp fall has more or less negated a steady decline in crude oil prices. Still, one must wait and watch as UPA II’s track record on reforms has been disappointing and some rollback is also anticipated.
The key stock indices are likely to rise at start. Asian markets are steady and US markets recovered smartly. European equities slid though, on persistent worries over the fate of Greece within the eurozone and its unpleasant impact on global economy. China’s provisional manufacturing PMI for May has come in weaker than April’s final print.
The global backdrop is fragile but few more bold policy actions can nullify that. The Nifty is likely to remain in a narrow range of 4788-4860 and waiting for a breakout.