Market Outlook

It appears that Nifty is evenly poised at 6300 odd levels    It also appears that markets are
showing signs of fatigue on the upside.    Having said that, the upcoming earnings season and
the fresh allocations from the global fund managers for the calendar year 2014 will bear out
the trend of the markets for the January series.

Santa Claus Worries

The strong economic data that has emerged from the US over the last fortnight is making a
strong case for the tapering of the US monetary stimulus program.    The trending yield
differentials of the developed world vis-a-vis the US bonds and the gains that the USD has
made against some major currencies like the British Pound,  Canadian and the Australian
Dollar, etc.seem to suggest that the tapering is just a matter of time.

The moot question is -- when will the scaling down actually commence from ?      and,
                                    what will be its nature ? 

Weekly Outlook

The kind of profit booking sessions witnessed in the post state election euphoria on
Monday suggests that the sentiment has turned around.    The week IIP data and the
CPI number further added to the gloom.    The absence of buying even at lower levels
is worrisome.

The coming week has major events in terms of the US Federal meeting and the subsequent
Reserve Bank of India policy meet.    These events will clearly bear out the course of the
markets for the rest of the December series.  

Weekly Outlook

The Q2 GDP data released on Friday was more or less what the market was anticipating.
It appears that the GDP growth numbers are forming a bottom.

For the coming week,  Indian markets will be driven by global cues.    Among other data
points,  markets will be watching Bernanke's speech on Monday,  US Q3 GDP data on
Thursday and US jobless rate data on Friday.   But for the tapering fears emanating from the
US,  Indian markets are likely to remain firm.    

Weekly Outlook

As anticipated,  markets corrected this week.    But the kind of closings seen over the past two
trading sessions is worrisome.    Having said that,  Nifty may only consolidate at these levels and
remain volatile in this upper band as this week involves November series expiry.

Markets will be watching India Money Supply (M3) data on Nov. 27 and Q2 GDP data on
Nov. 29.

                                                       Nifty Levels
Resistance        2                                 6100
Resistance        1                                 6040
Support             1                                 5950
Support             2                                 5930

Weekly Outlook

On Wednesday,  Raghuram Rajan allayed the market fears on the INR front.  
On Thursday,  markets reciprocated cheerfully.    Now,  Janet Yellen's comments
have brought new energy to the global markets.    Nifty may open gap up on Monday.
The short term sentiment may remain buoyant.    But,  how long will the euphoria last?

In recent times,  markets the world over have been driven by the central bankers
rather than economic fundamentals. 

Chart View

Gold is seen to be moving symmetrically with the USD Index.
So far as Nifty is concerned,  market is showing signs of fatigue.

HAPPY DIWALI

On this Diwali,  let us all make a firm resolve to bury the deadly sins of ignorance, pride, envy,
gluttony, lust, anger, greed, laziness and pave the way for knowledge, modesty, sympathy,
satiety, peace, prosperity, glory, dignity and opulence in our individual lives.

HAPPY DIWALI to all the viewers and readers.

Economic Statistics

The following is a table showing foreign direct investment as a percentage of GDP

for India and China.

                         Year                         China               India

                         ------                          --------               -------

                         2012                           7.51                0.95

                         2011                          10.30               1.54

                         2010                            9.09               1.23

                         2009                            9.30               1.96

                         2008                          14.37               2.70

Market Review

Markets seem to be discounting the possibility that the US Federal Reserve Bank would postpone
the tapering of its monetary stimulus program.    Markets will be watching the RBI policy meet on
Oct. 29.    The earnings season has failed to cheer the markets so far.    The juice in the current
uptrend appears to be getting over.    But for the RBI meet on Oct. 29,  there seems to be no big
negative surprises in the near future.

Given all these factors,  Nifty may remain directionless for some time.

Weekly Outlook

While the markets may have consolidated over the last fortnight,  it appears that the undertone
continues to remain positive.    Having said that,  markets may remain subdued ahead of the
earnings season.

Concerns from the USA with regards to the US government partial shutdown and potential failure to
raise the debt ceiling immediately will also keep the markets guessing in the days to come.
The USD index has already started to reflect this nervousness.

Market Review

Change of guard at the RBI head quarters,  alleviation of the Syrian crisis and, now, deferment of the
tapering of monetary stimulus program by the Federal Reserve Bank of the USA.    All of these
factors have worked well in favour of the bulls over the last fortnight.    It seems Diwali has arrived for the dalal street much earlier.

Now, all eyes on the RBI's credit policy dated 20th September.    Will the RBI provide the
necessary fillip to enable the Nifty to make new life time highs? 

Weekly Outlook

The week gone by witnessed tremendous pressure both in the equity markets and the INR.
It seems markets are over reacting to the imminent tapering of the monetary stimulus program
by the US Federal Reserve Bank.    It also appears that the markets have overshot the fundamentals.

Having said that,  there is further room for Nifty on the upside.    Going forward,  markets will be
treading through intense volatility.
    

Global Economic Parameters

Country                                                 Business Confidence         Consumer Confidence
---------                                                    --------------------------                ----------------------------

China                                                              50.30                               97.00
Euro Area                                                        -0.53                              -17.40
France                                                             87.00                               81.62
Germany                                                        106.20                              42.00
India                                                               51.20                              118.00
UK                                                                   7.00                              -16.00
USA                                                                55.40                              80.30

Market Outlook

The past several trading sessions witnessed rampant selling in the markets causing Nifty
to dangerously test long term averages on the downside.    Some of the sectoral indices
too have been hammered out of shape.    Further, there seems to be no end to the woes
of the INR.    No matter what measures are taken by the government or the RBI, the
continuing weakness in the INR just doesn't seem to abate.    The general risk off in the
global environment too is further aggravating the bearishness.

Nifty is trading in an oversold zone.    Therefore, going forward, a possible rebound can
not be ruled out.    Lastly, no matter what, Nifty must hold above 5500.    Nifty closing
below 5475 -- 5500 zone does not augur well.

Market Synopsis

Earnings downgrade and the continuing depreciation of INR vis a vis the USD pushed
the equity markets southward in this week.    The only factor that saved the markets
from an absolute bloodbath was the US Federal Reserve's decision to continue with its
monetary stimulus program.

Going forward, markets will continue to remain under pressure.    Traders may adopt a
sell on rise policy.

Weekly Outlook

The RBI policy meet on July 30 may turn out to be a non-event given the fact that it has
already taken number of measures at addressing the immediate troubles facing the
economy.

Nifty, for the coming week, may find it difficult to trade above 5960 -- 5980 range.
However, the sentiment will continue to remain bearish with an eye on the upcoming
results.

Despite the various measures taken by the RBI,  INR is failing to close below Rs.59.
The past week saw rupee trading in the range of Rs. 59 -- Rs. 59.70 vis a vis the USD.
A close above Rs. 59.90, which seems to be unlikely at least for the near term, would
indicate fresh weakness.

Market Synopsis

It seems that the RBI has lost sleep over the outlook on INR going forward.    At least,
the spate of measures undertaken by the RBI in a short span of time to shore up the INR,
at the cost of economic growth, seems to suggest so.    These measures may at best arrest,
if not reverse, the sharp depreciation of the INR going forward.

Some steps taken by the RBI -
1.  Banks barred from proprietary trading in currency futures and exchange traded options.
2.  Lenders allowed to trade only on behalf of clients.
3.  Borrowing under liquid adjustment facility (LAF) capped at Rs.75000 cr.
4.  The lending rate for marginal standing facility (MSF) hiked by 200 bps.
5.  Open market sale of bonds worth Rs.12000 cr.
6.  LAF borrowing cap further tightened to 0.5% of every bank's deposits.
7.  Banks are required to keep CRR balance of 99% (up from 70% earlier).

Outlook on INR

According to a study by one of the rating agencies, about 45% of India Inc.'s forex debt
is short term in nature.    This amounts to approximately $100 billion.    Further, as per
the report, this forex debt is unhedged.    Come September, the US Federal Reserve bank
may tighten it QE3 programe.

Imagine a scenario when these corporates suddenly rush to the markets to hedge their
exposures coinciding with the Federal Reserve's decision to scale down its QE3.
It will not be a pretty sight to be watched by the faint hearted person.

No wonder, the RBI and the government of India woke up before the nightmare.

Weekly Review

The RBI took measures at curbing volatility in the INR by tightening liquidity and hiking
the interest rate on marginal standing facility by 200 bps.    The government of India in
its effort to shore up the rupee, opened foreign direct investment in 13 sectors, including
100% FDI in telecom.

Ironically, the markets did not cheer the developments.    Today's session in the USD -
INR trade corroborates the pessimism surrounding the INR.    Failure to convincingly
close sub Rs.59 levels vis a vis the USD, indicates weakness for the INR.

Weekly Outlook

In the wake of Mr. Bernanke's outlook on scaling down the QE3, market nervousness
has been soothed.    But how long?

Locally, IIP data for June at -1.6% and CPI for June at 9.87%  look dismal.    Markets
on Monday may not receive the data well.
Trade deficit narrows to $12.24 billion for June versus $20.14 billion for May.
INR may see some respite.

                                            Nifty
Resistance    2          :           6090
Resistance    1          :           6075
Support         1          :           5940
Support         2          :           5890

Outlook                    :            Stable

           

Advent of Earnings Season

The earnings season is about to kick off.    How will the panorama of Q1 results unfold?
What lies ahead for the markets?    How will the 'second coming' of Mr. Narayanamurthy
affect the outlook on Infy?

One may find answers to many more such questions in the coming days.
So,  wait and watch.

Market Synopsis

Yesterday, the jobless rate in the US stood at 7.6% for the month of June.    It seems the
jobless data is forming a bottom at these levels.    Further, 195,000 new jobs were created
in the previous month, much better than what the market was anticipating.    On the back
of these developments, speculations are rife in the market that tapering of the monetary
stimulus program is just around the corner.

Locally, the President of India has approved the Food Security Ordinance.    It is
anticipated that the Food Bill is likely to put pressure on the government exchequer to the
extent of Rs.125,000 crore.

In the light of these developments, equity markets in India for the coming week are
likely to remain under pressure.

Spectre of an earnings downgrade?

According to a recent RBI assessment, bank credit to most of the major sectors
continued to grow at a slower pace than last year, reflecting the continuing slowdown
in the economy.    Further, one of the broking houses has cut FY 14 EPS for 34
companies.

Development such as the above, raise one question.  
Is an earnings downgrade imminent?

Weekly Outlook

In a bold move, the government hiked gas prices from $4.2/mmbtu to $8.4/mmbtu
(million metric british thermal unit), with effect from April 1, 2014.    Investments in the
oil and gas sector will pick up.

Another positive development came in the form of the Prime Minister setting ambitious
target for investments in the infrastructure sector.    In an attempt at addressing the
bottlenecks in this sector, Rs. 115,000cr. worth of projects on PPP mode were identified
on priority basis for investments ( out of which, at least, Rs.1 lakh cr. worth of projects
are expected to kick off in the coming six months).

Markets cheered the developments with a big push upwards.    Going forward, the positive
sentiment may take Nifty to higher levels.

Weekly Review

The current account deficit data for the month of March 2013 narrowed to 3.6% of
GDP,  much below that what the market was anticipating.    At last, some breather for
the INR.    But, this is only short term.    This data may only arrest further depreciation
in the rupee for some time.   

The resurgent trend in the USD index is a strong headwind for the INR.    The finance
minister, Mr. P Chidambaram, has cautioned that current account gap may rise going
forward.

Weekly Outlook

The week gone by witnessed high volatility and nervousness, perhaps over-reacting to
the Fed.'s announcement regarding its assets buying programe.    Having said that, Nifty
is trading at 5650 odd levels.    At these levels, valuations are looking very attractive.
Some large caps and mid cap stocks are available at mouth-watering valuations.

Daredevil traders willing to go long at current valuations have risk - reward ratio in their
favour.    A sharp rebound in Nifty on the upside seems quite possible.

Market Synopsis

The RBI policy meet of June 17, turned out to be a non-event as anticipated by the
markets.    Market also ignored the seven month high trade deficit data for the month
of May.    Perhaps, Nifty was oversold at 5700 odd levels causing it to rally to 5850.

Going forward, all eyes will be on the Federal Reserve Bank over the next couple of days.
The Fed. has kept the markets guessing with regards to the future of its assets buying
programme.    While one segment of the markets believes that the QE3 will be tapered
sooner than later, my own assessment is that Mr. Bernanke may probably choose to pass
on the decision making event to his successor in legacy.    Perhaps Mr. Bernanke may not
want to cause a spoilsport in terms of sharp reaction in global markets.
 
Mr. Bernanke has got another 6 months tenure in office as the Chairman of the Federal
Reserve Bank.

Weekly Review

This week so far witnessed steep fall in the value of the emerging market currencies
vis a vis the USD caused due to the fears regarding the tapering of the QE by the
Federal Reserve Bank of the US.    The INR was the biggest hit currency followed by
currencies of other emerging economies.    The acute current account deficit was another
factor driving the depreciation of the INR.

Going forward, so long as the uncertainty regarding the downsizing of the assets buying
programe persists, markets the world over will continue to remain nervous and volatile.

Global Economic Parameters

Country                                             Business                             Consumer
                                                       Confidence                          Confidence
------------------------------------------------------------------------------------------------------------------
China                                                125.60                                   103.70
Euro Area                                            -0.76                                   -21.90
France                                                 84.00                                    78.61
Germany                                            105.70                                    36.40
India                                                   49.90                                    120.00
UK                                                       5.00                                    -22.00
US                                                      49.00                                     76.20

Vicious Circle

The dwindling returns in Nifty in dollar terms is causing the waning of FII inflows.
The dwindling FII inflows is putting more pressure on the INR vis a vis the USD
causing the INR to depreciate at a vigorous pace.    This is exactly the opposite of what
the Finance Minister would have wanted to happen.    The acute current account
deficit problem is another reason for the depreciating rupee.

The depreciating rupee may give rise to cost push inflation with a lag effect.
Something which the RBI would not want to happen, as this may restrict it from the
possibility of any further rate cut.    Now, if lending rates do not come down, how will
capital expenditure pick up?

Given this scenario, how will the government come out of this vicious circle of weak
rupee, high inflation, slow growth and almost nil capex?    Hard times ahead.

Market Synopsis

No clear trend seems to be emerging for Nifty.    INR continues to remain under
relentless pressure vis a vis the USD.

Any pullback in Nifty upto 6030 -- 6050 levels should be used to initiate fresh
shorts.    Market bias will continue to remain negative for some more time.

Weekly Outlook

Nifty is showing inherent weakness.
A recovery to the levels of 6075 -- 6100 may be used to go short.

Hope the data points that are to be released in the coming week
do not disappoint the markets.

Market Synopsis

In the US, the Federal Bank seems to be indecisive at reducing its assets buying
program until it thinks that it is convinced that the US recovery is sustainable and the
jobless rate comes down to 'comfortable' levels.    Therefore, the QE3 will continue
for some more time.    Liquidity conditions will remain easy.

In China, the economic data (PMI) has disappointed the markets.    Nikkei was totally
rattled today taking the brunt of weak Chinese data and strengthening US dollar.

Locally, the strength in USD index has further aggravated the already prevailing
pressure on the INR causing the rupee to depreciate to Rs56 per USD.    The markets
reacted sharply to global developments and pressure on the INR.   Now, we have clearly
lost the upward momentum in Nifty that was existing until last week.    The spike in
the volatility index also suggests the same.

Bulls beware.     While we have another week for the month of May to get over,
the adage - 'sell off in May and go home' may as well come true this time.

Liquidity Induced Rallies

Central Banks, the world over, are on a monetary easing mode to spur growth for
their respective economies.    Barring the eurozone, these measures seem to be
yielding results in varying proportions.    US is showing signs of recovery.    In Japan,
Abenomics seems to be working for its economy.    At least, the latest Q1 GDP
number seems to suggest so.

While these monetary easing measures may have spurred growth, the other aspect
of these measures is the conspicuous stock market rallies world over.    US stock markets,
the Nikkei, DAX, Nifty, etc., are trading at their record highs.    In the context of Nifty,
market is rallying on the back of strong FII inflows defying macro economic fundamentals.

The IMF in its latest report on emerging economies cautioned that "financial imbalances
and rising asset prices, fuelled by strong credit growth and easy financing conditions
are building in several Asian economies".    In the event of severe global slowdown,
capital flow reversals and falling external demand would exert a powerful drag on Asia's
most open economies.

Weekly Outlook

Nifty is inching upwards on low volumes.    It seems there is no conviction
in the ongoing uptrend.    On the technical chart,  market is trading in an
overbought zone.

I will not be surprised if market takes a breather.    If the upcoming quarterly
numbers do not meet street's expectations or the inflation numbers disappoint
then, a correction cannot be ruled out.

Global Economic Parameters

Read some useful comparatives.

Country                            Investments                Gross National Savings
                                        (% of GDP)                       (% of GDP)

China                                    46.875                              49.473
India                                     34.915                              29.802
Japan                                    20.581                              21.57
France                                  19.901                              17.569
Euro Area                             18.285                              20.20
USA                                     16.16                               13.131
  

Weekly Outlook

With Reserve Bank of India meet on May 3rd turning out to be a non-event,
market for the coming week is likely to remain sideways.

Upcoming quarterly results, factory output data and global cues will determine
the trend of the Nifty in the coming sessions.

Market Synopsis

Yesterday, India slashed the rate of tax levied on the interest that foreign investors earn
on their investments in local bonds to 5% from 20%.    The new rate will be effective
from June 1, 2013 to May 31, 2015 to FIIs and individual investors in govt. securites
and rupee-denominated government and corporate bonds.    Earlier, the 5% tax rate on
foreign investments was applicable to long term infrastructure bonds.    But, with the
latest decision by the govt., the lower rate will be extended to all categories of govt. and
corporate bonds.    Market is seeing this measure as another step taken by the govt. at
addressing the Current Account Deficit.
 
INR closed at 53.80 versus the USD on Tuesday after appreciating 43 paise over Monday's close.   
Market has responded positively to the govt.'s measure.

Yesterday, Unilever announced its decision to go for a strategic stake in Hindustan
Unilever Limited from 52.5% to 75%.    The market received the news cheerfully.
The stock price shot up by 17% yesterday.

All these are adding up to the already prevailing positive sentiment in the market.

Weekly Outlook

Nifty may consolidate at higher levels and trade in the range of 5850 -- 5950
during the coming week ahead of the Reserve Bank of India's policy meet
scheduled on May 3rd.

While the market is expecting a minimum of 25 bps rate cut, RBI may choose
to postpone the possibility of any rate cut till the arrival of monsoon.

Global Economic Parameters

Country                              Industrial Production        Consumer Confidence

Brazil                                         -3.20                                  114.30
China                                          8.90                                  108.20
India                                           0.60                                  121.00
Russia                                        2.60                                    -7.00
France                                       -2.80                                    83.51
Germany                                    -1.80                                   36.30
Spain                                         -8.50                                   52.10
UK                                            -2.20                                  -26.00                      
Euro Area                                  -3.10                                  -22.30
Japan                                        -10.50                                  44.80
US                                              3.50                                   59.70




       

Weekly Outlook

The positive sentiment is likely to continue for the coming week.

Resistance     2     5875
Resistance     1     5850
Support          1     5740
Support          2     5700

Outlook         :     Positive.

Too Little, Too Late

Some fairly good results from corporates like IndusInd Bank,  MRF Tyres,
TCS,  HCL Tech,  Yes Bank, etc. coupled with the continuing downfall in
prices of crude oil may have caused Nifty to rally further in today's session.

The govt. at the centre has come out today with its Annual Supplement to
the Foreign Trade Policy.    Amongst other measures,  the govt. has widened
the Interest Subvention Scheme to cover 134 more subsectors of engineering
sector.    It further extended the scheme upto 31st Mar., 2013.
These measures may be termed as,  ' too little, too late'.

Market Review

Just a couple of days back, Infosys had disappointed the markets.
But now, with positive inflation numbers, fall in gold, crude and some other
commodities' prices, sentiment has turned around.    The same has been
reflected in today's trade, with Nifty closing with strong gains.

If Reliance Industries Limited comes out with good Q4 numbers today,
the prevailing positive sentiment will receive a further boost causing Nifty to
possibly rally more in the coming sessions.

Market Review

Just a couple of days back, car sales number contracted by 6.7% as per SIAM.
This number shows that car sales have contracted first time in over a decade.

Now, Infosys has come out with its Q4 results.    The numbers have absolutely
disappointed the markets with its net up by only 3% YoY.    No wonder, Infy
shares crashed by 20% intraday.    What is more concerning is its annual guidance,
projecting a 6% - 10% growth in revenues.    This is far below industry standards.
If Infy results are a harbinger of what is going to follow in the earnings season, then,
an earnings downgrade is inevitable and imminent.

Industrial output (IIP) numbers for the month of February has come out at 0.6%.
Barring consumer goods, all other constituents of industrial output basket have declined.

Things are looking very gloomy for Nifty.    Hope FIIs don't turn bearish at this crucial
juncture.

Market Review

Nifty seems to be evenly poised at 5550 odd levels.

With earnings season ahead, market players will be keeping their
fingers crossed.    However, the consensus in the market seems to be
suggesting that the earnings season is likely to remain muted.

Market Synopsis

Globally, Japan has announced a major monetary easing policy surprising
the markets with regard to the intensity of the policy action.
Bank of Japan has pledged to double its govt. bond holdings in two years
and also to buy more of equity ETFs. (exchange traded funds).
BoJ has also decided to extend the average maturity of bonds to around
seven years from around three years currently.

Locally, speculations about early elections, policy inaction on the part of
the govt. and almost no positive triggers in the immediate future,  have
haunted the markets.    In such a scenario, volatility may remain high
for some time.

Market Synopsis

Globally, while S&P 500 is rollicking on the back of good US economic data
supported by the strength in the USD index, things have been very gloomy
on the eastern side of the Atlantic, the Eurozone, and continues to sink deeper
into the pit.    Economists are now talking that after Cyprus, may be Slovenia
and Hungary need to be bailed out next.

Locally, India's current account deficit has touched record highs.
What is more concerning is that the government is relying heavily on FDI and
FII inflows to finance the CAD rather that taking strong measures at augmenting
exports.    While exports cannot improve in the short term, what is glaringly
missing is the government's inaction at taking policy measures to provide fillip
to exports.

Market Outlook

F&O expiry, financial year end, headwinds emanating from the eurozone
in terms of the Cyprus bailout and its probable ramifications on the future
of Euro, lack of reform measures from the FM and the pullout of DMK
from UPA may all have weighed on the market sentiment causing Nifty to
trade at lower levels during the fag end of the March series.

But, going forward, a relief rally is quite possible just before the rolling out
of the earnings season.    In such a case, 5900 may be revisited on the upside.

Global Economic Parameters

Some interesting economic parameters.

Country                              Capacity Utilisation Rate          GDP (YoY)

China                                                                                     7.9
Eurozone                                              77.2                          -0.9
France                                                  78.6                          -0.3
Italy                                                      68.3                          -2.8    
Spain                                                    68.86                       -1.9
UK                                                       53                              0.3
US                                                       79.06                         1.6
India                                                      74.7                         4.5

Market Outlook

Nifty for the next couple of trading sessions is likely to be :

Resistance     2     :     5785
Resistance     1     :     5700
Support          1     :     5615
Support          2     :     5610

Market Synopsis

The dismal demand situation in Europe can just be imagined by the
below mentioned facts  :
a.     Motor majors like General Motors, Ford Motors and Honda Motors
        have actually shut down their plants since mid - 2012.
b.     Car prices in Europe were cut 14% on average last month, spreading
        across several motor majors, to lure improvement in sluggish demand
        sentiment.
c.     Ironically, according to the latest data, car sales actually dropped by
        10% over previous month.

Locally, DMK has pulled out from the UPA sending shivers across the market.
Therefore, the market sentiment for the rest of the week is likely to remain
cautious and tentative.

Market Synopsis

Cyprus turmoil has unnerved the markets today.
What is more concerning, is the dangerous precedent that this bailout
sets in terms of other so-called depositors guarantees.

This bailout has added fuel to the already fast dwindling prospects of Euro's
future.    This may also trigger a fresh capital flight scenario in the eurozone.
Volatility may rise in eurozone stock market indices.

Locally, market is keenly eyeing RBI policy on March 19.   
Market is expecting a minimum of 25 bps rate cut.

Market Outlook

Nifty for the next couple of trading sessions is likely to be :

Resistance    2    :    5930
Resistance    1    :    5925
Support         1    :    5890
Support         2    :    5785

Weekly Outlook

Strong US economic data supporting the strength in USD index.
Recovery in US will be celebrated by the markets positively.

Locally,  the Finance Minister in his Budget speech clearly expressed his resolve
to tighten the fiscal policy.    This may prompt the RBI to shift its priorities
from hawkish monetary policy to a growth oriented one at its meeting on 19 Mar.

Until then,  Nifty is likely to remain sideways at elevated levels.

Weekly Review

Maruti Suzuki India Ltd.,  Tata Motors and General Motors have sliced
production in varying proportions in order to arrest stockpiling of inventories.

Consumption demand seems to be much weaker than anticipated,
at least in the Auto segment.

Global Economic Parameters

How about going through some comparisons while sipping some coffee :

Country                           Unemployment Rate             Govt. debt to GDP

China                                        4.10                                   25.80      
Eurozone                                  11.90                                  87.30  
France                                     10.30                                   86.00 
Italy                                         11.70                                 127.00
Spain                                       26.02                                  69.30
UK                                            7.80                                  85.00
US                                            7.90                                 101.60 
India                                          9.30                                   68.05

Weekly Outlook

The market for the coming week is likely to be :
Resistance    2    :    5795
Resistance    1    :    5770
Support         1    :    5670
Support         2    :    5620

Stark Realities

Does the Finance Minister have space to take measures to spur growth particularly in light
of the below mentioned realities ?
a.     High crude oil prices for a prolonged period of time.
b.     Miserably weak demand situation in Eurozone.
        Little prospects of improvement in exports in the near to medium term.
c.     Wide current account deficit putting relentless pressure on INR vis a vis the USD.
d.     More than neglected infrastructure and power sector.
e.     Compulsion of presenting the last budget before going to polls.
        Needless to say that the possibility of the budget being populist in nature cannot be ruled out.

Weekly Outlook

No matter how the Union Budget 2013 pans out,
one thing is sure,  volatility is bound to rise.

Now that the market is precariously poised at 5850,
outlook for the coming three days is likely to be  :
Resistance  2  :  5900
Resistance  1  :  5880
Support       1  :  5820
Support       2  :  5800

Western Vibes

It seems the Federal Reserve has halted its Assets Buying Programe.  At least, the FOMC
minutes suggests so.  This could dry out liquidity to the tune of $ 85 billion on a monthly basis.

This in all probability will have a short to medium term bearish impact.  No wonder that global
indices reacted to that negatively today.

Weekly Outlook

Nifty may remain in the range of 5850 -- 5920 for the next couple of days.

Market Synopsis

Market has just witnessed a dismal earning season.
Prices of some stocks,  some sectoral and other indices are lingering around the 200 DMA.
Market is continuing to exhibit prolonged weakness.

Despit all of the above,  global risk on seems to be holding up Nifty from caving in.
But how long?

Market Review

Inida's Industrial Production has shrunk by 0.6 % YoY for the month of December 2012.
A renewed bearish sentiment in Euro vis a vis the USD has been witnessed over the past week.

Events such as the above are only adding to the already prevailing gloomy sentiment in the market.

Weekly Review

Market is showing sustained weakness over the past few trading sessions.
Some major stocks have corrected more than 5%.     However,   Nifty has not shown any
significant correction in terms of price.   Volatility continues to remain low.

Going forward,  sentiment will continue to remain bearish for some more time.
Market may continue to slide down at snail's pace.

Market Review

Volatility spiking up in US.
Eurozone fears resurfacing. 
Relentless pressure on Euro vis a vis the USD.
With almost no positive triggers in the near future for Nifty, scenario is looking grim.

Amidst all this,  hope Nifty stays above 5950 on closing basis.   Close below 5950 may see a deeper cut.

Weekly Outlook

Risk - reward ratio is turning into bears' favour.
Market is showing signs of caving in.

Weekly Outlook

Market is expecting a minimum of 25 bps interest rate cut announcement from RBI at its Jan 29 meet.
As against this, RBI governor had clearly stated earlier that controlling inflation will be his top priority.

Therefore, speculations are rife in the market over the fate of interest rate cut.  This was clearly evident from the kind of directionless and lacklustre trading sessions that were witnessed over the past few days.
Finally, outcome of RBI Jan. 29 meet will clearly bear out the mood of the market for the coming week.

Weekly Review

Despite factors like deferment of GAAR,  positive results / guidance from Infosys and stellar quarterly performance from the giant, Reliance Industries Limited, market is not showing any enthusiasm  to breakout and gush upwards.
In fact, it is only inching upwards tentatively.

Weekly Outlook

Market seems to be losing steam on the upside.
A correction may possibly take Nifty to 5825 -- 5850 levels.

Weekly Review

Market is trading in a narrow range.
Even a sparkling quarterly result from Infosys failed to boost market sentiment.
Market seems to be lacking direction. 

Paradox of Forecast and a Sovereign Downgrade

It is difficult to understand how people project levels like 7000 for Nifty when rating agencies are warning of a India sovereign downgrade to ' junk ' status for huge number of reasons with very little prospects of improvement.
Even if we were to believe that equity markets may rally globally in 2013, Nifty may only inch upwards and retest the 2008 highs or remain at elevated levels for a prolonged period of time and only consolidate at higher levels.

How will the earning season pan out ? How will the uncertainty related to debt ceiling in US be addressed ?
Until the picture does not get clear, mkt may remain sideways.

HAPPY NEW YEAR to all the viewers.
Hope stability and prosperity returns to the markets in 2013 enabling investors to make some descent money.