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.