Markets looking Ominous…..beware the Ides of March !…Sensex down 2% and from 18000 can seek sub 16000 levels in 2011

Markets are looking increasingly ominous and  Sensex is likely to correct from 18000 + levels to be derated down to PE 14-16 range….sub 16000 possible in a few weeks…while I do remain bullish for the longer term I simply cannot ignore bearish macro indicators in the shorter term 

William Shakespeare penned this warning as a part of his play  ‘Julius Ceasar’…”Beware the Ides of March”… it is !…different RTC but I’m too issuing a caution ! 

This macro view is largely influenced by

  • Oil Prices likely to surge even further and cross US $ 150 a barrel as fears mount of ‘ No Fly Zone’ coming up in Libya,Saudi Arabia flares up even more ,Japan begins to count the tsunami losses and a growing voice against nuclear energy will increase the demand for Oil as Fuel worldwide
  • Inflation worries continue to challenge as prices of non oil commodities too show no sign of abating
  • Pressure on Interest Rates will remain and this year the rates in India will keep firming…they are kissing 10% levels already…so to take that extra risk to earn specific Equity Premium to return aggregates of 18% to 20% from Equities (anything lower is not worth it) may not be everyone’s cup of tea 
  • Geo Political Tensions mounts in the MENA Region
  • Sovereign Defaults again loom ahead in Europe 
  • FII Inflows are slowing down in 2011…on some days we actually see worrying outflows
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