Archive for April 12th, 2010

Weekly Update 12th-16th April 2010

The markets continued with their upward momentum despite the concerns arising that Greece may default on 304.2 billion euros ($405.2 billion) of its debt. Trichet expressed confidence that Greece won’t default & many believe that IMF may come in for a bailout.

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Concerns also arose over the huge gains that markets world over has seen in a year. All in all the optimism about the strength of the recovery in global economy suggested by various positive economic data kept the market pace intact. According to National Institute of Economic and Social Research, UK GDP expanded by 0.4% in the first quarter matching the increase seen in the last quarter of the previous calendar year.

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Huge bank credit offtake in the last fortnight ending 26 March 2010 to the tune of Rs. 1.15 lakh crore after the continuous signs of Industrial,service & external sector recovery will increase the faith among the investors about the economy. The recent run up in the markets hassomewhat discounted the expected good corporate results & the increase in policy rates by the RBI to avoid the danger of generalised inflation in the economy. From the market activity, it looks that the Midcap & small cap would remain the favorites among the investors due to relative valuations. In the coming week, focus of the market would be on the Infosys results & guidance & market would also look on to the IIP numbers, especially the capital goods to gauge the momentum in the Industrial activity.

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Trend of all world markets is up and so have the Indian Stock Markets posted a 9 week continuous rally. The falling dollar index and the rising rupee gave steam to various asset classes which all moved up. The debate between the problems of Greece or other European nations will be unending but till the trend is up, one should look at longs. Nifty has support between 5250-5150 levels and Sensex between 17700-17300 levels.

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Recent buoyancy coupled with projected tightness in the supply of various commodities is signifying the bottoming out of global economy.

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Improvement in housing, job and retail sales data are stimulating fresh buying in commodities, especially in metals and energy. Remarkable jump in dollar index is unable to give much impact on commodities as they are trading on their own fundamentals. Nevertheless, several commodities hit multi months high, hence cautious approach is advised here. Appreciating rupee, which gained more than 5% in just nine weeks, is most likely to eat up the volatility in domestic exchanges. Price movements could be locked in agro commodities as well, particularly in spices, as export activities have become subdued due to the same reason of appreciation in rupee.

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Stay Tuned for More Updates :)