By Ruma Dubey

The market is having a dream run, with stocks scaling new highs. Yet there is a quiet sense of disquiet. A feeling that all could come crashing down.

At times when there is fear lurking at the back of one’s mind, it is always best to stay prepared – forewarned is forearmed.  Let’s take a quick look at what could probably be the ‘panic buttons’ which could push the markets downwards. These are broad triggers but working the other way.

1: Geo-political tensions: This is like a ticking time bomb and the Middle East region is indeed like a tinder box – one does not when it could light up. Iraq and Syria are simmering, camouflaging in its smoke the ongoing boil in Libya.  For us sitting here in India, this does not seem like a big deal, but world over, the ISIS and its rise is big news. It could change the entire map of the world in next decade.

The Greek saga is also ongoing and its more about brinksmanship. If Merkel relents to Greek’s requests, maybe once again things on the Europe front will get back into an uneasy sense of quiet.

2: Crude price: Oil prices have been low for some time now and hope that it remains so for much longer. But herein lay the catch – USA is on a bounce back which is a good thing but if the economy stars rolling, crude will once spike up. So basically, you cannot have it all!

3: Yellen and Rajan: These two chiefs of US Federal Reserve and RBI respectively would have a big impact. Rajan has done his bit for now by bringing down rates and at least for some time now, maybe entire of this year, we cannot expect any more rate cuts. So “good news” to that extent from Rajan will not come.

On the other hand, Yellen is expected to hike rates by Q3 of this fiscal and that’s an event the whole world is awaiting.  But logically, the markets have digested this event to some extent so the impact might not be all that earth shattering.

4: Inflation: it is under control now but this is more on account of the lower base effect. Once this goes from August, the true picture will emerge and looking at the prices on the ground currently, with all pulses selling over Rs.100/kg, this monster could be really ugly. In coming months, this economic data will be the biggest trigger.

5: Monsoon and crop harvest: Everything hinges on a good and bountiful monsoon which will give us a rich harvest. Two opposite views of Skymet and IMD have left us confused. The true picture, whether it is drought or good rains will emerge only by July. Till then this uncertainty will continue.

6: MSCI move to include China A shares: This could have a huge impact as the fear is that the moment his happens, funds will go from India into China. Inflow to the tune of $400 billion is expected into China. For now, it has been postponed; let’s see when it happens…

All these factors, each one of them can be overshadowed by one single trigger – the Govt taking policy actions. It has already started doing so, as we saw yesterday. Getting ready for the drought eventuality is also a start in the right direction. Thus if the Govt works, none of these global factors could impact the markets much; it could all be hunky dory!