Pre Open Thoughts: Uncertainty & Volatility!!!

Pre Open Thoughts: Uncertainty & Volatility!!!

Ø A successful man is one who can lay a firm foundation with the bricks others have thrown at him. The Indian markets closed with strong gains in last session as they got some support in the second half after the European market opening, which helped the local indices to move out the lows of the day. The appetite for risk could extend for a day or two. However, doubts persist whether the upbeat can be sustained given the foggy outlook which continues to look rather glum in the face of mixed bag of macro-economic numbers. All eye will be on Annual GDP estimates which is due today.

Ø The Indian economy is likely to grow by ~7.5% in FY12 vs. 8.4% in FY11. We feel the bounce in Indian markets may bump into resistance amid persistent worries. The prospects for the Indian economy blinding looking at valuations are no longer valid in choosing stocks.

Ø Although the undercurrent is upbeat, one must exercise some caution as there could be minor hiccups. The start is likely to be encouraging as most of the Asian indices are in green so as the SGX Nifty. Wall Street closed flat while their European counter parts declined.

Ø According to our systems Nifty is likely to face resistance at 5400 levels which was our earlier target on Nifty when we had initiated a LONG on it at 4860. We feel that 5400-5100 will continue to be the broad trading range on the Nifty in the short term.

Ø The 3rd quarter earnings season is at its peak. The Union Budget is likely to be presented in the parliament in mid-March 2012. The annual budget is usually presented on the last working day of February. However, the budget is likely to delay this time due to the ongoing assembly polls. Polling for assembly elections in five states concludes in early March 2012.

Ø To cut the long story short Buckle up and step up your vigil to dodge short-term uncertainty and volatility.

Results Today:

BILT, Cadila Healthcare, GMR Infra, Hindustan Oil Exploration, ICRA, IL&FS Transportation, JK Lakshmi Cement, M&M, Omaxe, Opto Circuits, Phillips Carbon, Radico Khaitan, Triveni Engineering, UB and VIP Industries.