Pre Open Thoughts: Risk On!!…Fear Gone?

Pre Open Thoughts: Risk On!!…Fear Gone?

Ø Only those who will risk going too far can possibly find out how far one can go. The rising market of the new year had brought back memories of 2007 where the Risk appetite was back on the table. The question is whether the new year’s upswing will be sustainable? We Feel it Won’t take long for fear to return and some cooling is a given after a strong rally. So, ride the bullish wave as long as it lasts.

Ø The drift in markets in last two sessions has forced market participants to give a rethink to their strategy on domestic markets especially at a time when international crude oil prices have spiraled to unsustainable levels and are showing little signs of correcting any time soon and also ahead of important domestic events next month.

Ø Today, the start of the new week is likely to be on a cautious note. One should keep a close eye on FII flows, which have been quite robust so far. Q3 GDP data and LTRO-2 by the ECB will among the events to keep on one’s radar for this week. Back home the Centre must not lose any time in accelerating reforms which will in turn become fuel for our markets.

Ø According to systems as mentioned in our previous note there is no clear direction and market may go into consolidation and is likely to trade between 5400 -5600 on the way down 5400 level, may now act as strong positional support for the market.

Ø The Foreign institutional investors(FII’s) continued to be on the buying side with provisional figures for Friday stood at Rs 89.55bn in the cash while the Domestic institutional investors (DIIs) were net sellers at Rs 8.36 bn, as per the provisional figures released by the NSE.

Events to look for:

29-02-2012: India Qtrly GDP

06-03-2012 Assembly Election Result Counting

14-03-2012 Railway Budget to Be Presented

15-03-2012 Economy Survey Report to Be Released

15-03-2012 Mid Qtr Review Of RBI Monetary Policy

16-03-2012 Union Budget to be Presented