Pre Open Thoughts: Happiness is the Result!!

Pre Open Thoughts: Happiness is the Result!!

Ø Action may not always bring happiness; but there is no happiness without action. After the RBI action on the CRR cut which will inject primary liquidity of Rs 320bn into the banking system as liquidity easing was required to ensure that private sector credit demand does not get crowded out in the wake of substantial government borrowings. A sustained downtrend in non-food manufactured products inflation, which has been sticky, would significantly raise the probability of a rate cut in the March policy. The sharp CRR reduction would ease pressure on short-term rates.

Ø The start looks to be soft due to renewed selling in global equities. US stocks tumbled and closed flat while European indices too closed lower. Asian markets are in positive zone. Overall the trend will be choppy due to the F&O expiry today. Even otherwise, volatility is likely to persist, as truncated week and corporate results. And also the fate of Greece and Europe hangs in balance.

Ø The rising window in the Nifty at 5200 remains critical resistance level; on flip side any close below 4900 now will negate the intermediate uptrend. The near-term trading range for the Nifty is seen at 4900-5100. The same could widen to 4600 on the way down in case the sentiment takes a fresh beating.

Ø Over all according to our systems the near term prospects for the Indian markets might remain positive as long as the Nifty holds above 5100 on a closing basis with a target of 5400 on the NIFTY.

Results Today: Alstom Projects, AP Paper, Asahi India, BEML, BOB, Deepak Fertilizers, Future Capital, Himatsingka Seide, Indian Hotels, IRB Infra, Sesa Goa, Union Bank, Vijaya Bank, REC, Patni computer, Oracle Financial, L&T Finance, Kirloskar Oil Engines, Tata Communications, Tata Global Beverages, Sterlite Technologies, PTC India Financial and JB Chemicals.

Rollover Snapshot:

• NIFTY rolls on E-1 day remained slightly above 3M & 6M averages whereas Market wide rolls remained at par with 3M and 6M averages.

• On the Sectoral front TEXTILE, FMCG and INFRASTRUCTURE shown higher rollovers; Whereas MEDIA, REAL ESTATE and Chem & Fert were laggards.

• Stock specific ABIRLANUVO and ABGSHIP shown above average rollovers whereas GLAXO and OIL were laggards.

Curr Mnth 3M Avg 6M Avg

Mkt Wide 62.13% 61.00% 62.61%

NIFTY 62.27% 59.30% 55.56%