Pre Open Thoughts: Optimism Set’ s In!!!
Ø Few things in the world are more powerful than a positive push. A smile. A word of optimism and hope The positive push by RBI has indeed brought smiles all over.
Ø Post market on Friday, the RBI Governor, Dr. Duvvuri Subbarao, has chosen to surprise the markets with a wider-than-anticipated cut in Cash Reserve Ratio (CRR) by 75 basis points from 5.5% to 4.75%. The cut is expected to inject Rs 48,000 crore into the system. This could have a positive impact on the markets next week at least till the budget.
Ø Separately the Parliamentary panel Committee has recommended that the Ministry may explore the possibility of abolishing the Securities Transaction Tax (STT). Given the context, all eye will be on the Union Budget as it would be interesting this time around, it will be presented on Friday.
Ø The start today may be positive as Asian markets are trading mixed. US stocks had another lacklustre session while European indices also settled mixed amid worries about Greece.
Ø According to systems market bounced back from lows of 5200 we feel Nifty is likely to face resistance on upside at 5550-5600 levels.
Ø Given the significant events lined up this week we feel that near term outlook is uncertain.
Ø The Foreign institutional investors(FII’s) continued to be on the buying side with provisional figures for Friday stood at Rs 12.84bn in the cash while the Domestic institutional investors (DIIs) were net sellers at Rs 129 mn, as per the provisional figures released by the NSE.
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