Pre Open Thoughts: The Pledge Factor!!

Pre Open Thoughts: The Pledge Factor!!

Ø …For a pledge is a chain that is always clanking and reminding the wearer of it that he is not a free man. Some pockets of the broader market may remain jittery about the pledged shares phenomenon. Promoters of as many as 125 big and small companies have pledged over 75% of their holdings, according to the latest data available with the exchanges.

Ø Inspiration and excitement seem to have taken a break these days and investors are hopeful to shake off the weariness. But with global cues being uncertain, the start may once again be tepid. We do not rule out some pick-up in momentum as the day progresses. Much will hinge on how trading in Asia and Europe unfolds. As usual, companies will start announcing earnings this month and remain in the spotlight. Infosys results are due on Jan 12.

Ø State-run oil companies have deferred hike in petrol prices. Meanwhile The Reserve Bank of India (RBI) has said it may ease its monetary policy amid fears of a global economic slowdown is likely shift its focus towards boosting growth. The RBI has raised its key interest rate 13 times since March 2010 in a bid to control rising consumer prices.

Ø The trading pendulum may swing either way. We remain bearish and a close below 4530 could exacerbate selling in the near term. Beware of volatility in large caps. The Nifty is likely to remain under pressure in higher levels as FIIs have once again turned net sellers and volumes are tepid. Stock specific action will continue.