Pre Open Thoughts: Pessimism at Peak!!!

Pre Open Thoughts: Pessimism at Peak!!!

Ø The future belongs to those who prepare for it today. Pessimism in the market is at the peak but most of the negatives are behind. Strong IIP numbers for November and soft food inflation data have raised expectations of a reversal in the RBI's hawkish stance.

Ø More important will be the inflation report for December, which is due on Monday. The impending monetary easing may not materialise at the Jan. 24 meeting, but the same is definitely on the cards sooner or later. The bond market has probably already discounted the fact that interest rates have peaked out with the yield on the benchmark 10-year government paper falling to a five-month low

Ø After enjoying a spectacular rally the trading activity for the Nifty narrowed down in a consolidation mode between 4800 and 4880 but renewed buying momentum is likely to be seen in select stocks. A move past 4900 could extend the current up-trend. We suggest taking extra care and precautions while trading in the risky Small-Cap and Mid-Cap counters.

Ø The trend may continue to be positive in India if the rally in the overseas markets sustains. European markets last night rose after Italy and Spain held highly successful bond auctions, easing worries about Europe's debt crisis, So did the US markets. Asian markets are mostly trading in the positive terrain.

Ø According to systems Nifty remains on the Buy Mode with reversal on break of 4730.While we can also see some profit booking in select counters at 4980—5000 levels.

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