As has been in the case of the last few months, Chidambaram has already started making the right noise. He recently said that the Budget would be responsible, even while most believed that the Budget would be a populist one given that this would be the last budget before the General Election in 2014. He has even gone onto target a fiscal deficit of 4.8 per cent of GDP for 2013-2014.
The problem with building huge expectations is that if they come a cropper the markets are likely to come crashing down.
"It is horribly consensus and something tells me that I should be a little bit cautious when everyone is saying the same things," Andrew Holland of CEO (Equities) of Ambit Capital warned in an interview to CNBC TV 18 recently.
Many analysts have suggested that the markets would rally sharply and hit a historic high ahead of the Budget. However, last week Indian markets ended with losses even as several global markets including the US, Japan, Europe and the Chinese markets rallied.
Indian markets are tired and no amount of FII buying is helping. In fact, the heavy selling by domestic institutions is wiping away all of the net buying from foreign funds. According to a report in the Economic Times domestic institutions net sold shares worth 16,750 crore, a record for a single month, in contrast to FIIs, who invested 22,240 crore.
Also, the sale of PSU shares by the government has put added pressure on liquidity and the forthcoming issues would add further pressure.
Clearly, markets are likely to remain subdued until the Budget. Hitting a record high before the Union Budget looks a remote possibility, while what happens after the Budget is difficult to predict.