Pre Open Thoughts: Spill over Effect!!

Pre Open Thoughts: Spill over Effect!!

Ø The best thing about the future is that it comes one day at a time. Investor optimism was bolstered after the RBI meet as it has done what it was expected to do whereas on the flip side the Federal Reserve has surprised the markets by pledging to keep interest rates “exceptionally low” till late 2014. The positive push has indeed brought smiles all over. Besides the main indices, the optimism spilled over the mid-caps as well as the small-caps.

Ø The spill-over effect is bound to be there at start. A lot will hinge on how the FII flows continue. Of course some resistance is bound to be there at higher levels as Nifty has rallied ~11% in the January series of futures expiry. A close watch has to be maintained on the developments at the Centre with State election on the way.

Ø Overseas markets are fired up. With European indices closing with handsome gains where are US closed negative. Most of the Asian indices are positive.

Ø For the Nifty, the level of 5175 turned out to be major hurdle on Wednesday. On Nifty any close below 5000, which kind of puts the ongoing intermediate uptrend at some risk. On the upside rally can be up to 5400 levels. However, we suggest to stick to quality stocks with sound fundamentals and a good track record on earnings.

Ø Dr Reddy’s Laboratories could be in focus today on reports that the company has run into trouble with the U-S health authorities for not highlighting important information on injectable generic, fondaprinux sodium.

Results Today: Bank of India, Bharat Electronics, BHEL, Blue Star, Canara Bank, Gujarat Alkalies, GSFC, Inox Leisure, Karur Vysya Bank, NHPC, NTPC, Petronet LNG, Pfizer, Redington India, Swaraj Engines, Tata Sponge, Venus Remedies and Wyeth.

Rollover Analysis:

Ø Market-wide roll 78%; Nifty roll 74%

Ø Market wide rollovers on the last day stands at ~78% which is line with the average three months rollovers of ~77%.