Pre Open Thoughts: Holding On!!

Pre Open Thoughts: Holding On!!

Ø  A wonderful Wednesday lay in store, as the worries of the world take a backseat. After a couple of nerve-wrecking and highly volatile sessions, some semblance of stability was much needed. Crude oil continues to be the biggest bugbear along with mounting worries. Most Asian markets are in the green. US stock indices finished with slim gains while their European counterparts ended higher.

Ø  Any material improvement will hinge on a multitude of variables such as crude, inflation, sliding Rupee, FII flows and last but not the least progress in policy making by the Centre.

Ø  The Congress is facing a Herculean task of restoring confidence among its cadres in the wake of the UP debacle. Elections in Himachal Pradesh and Gujarat will be another big test for the Congress.

Ø  The trend may continue to be positive in India if the rally in the overseas markets sustains. At the same time, things could be choppy due to thin trading volumes. Thursday’s F&O expiry might add to the volatility.  

Ø  We would continue to urge caution as there is likely to be some pressure at every rise. Intraday gyrations could remain elevated given the murky global scenario. So, while you may be tempted to jump in seeing lower stock prices, don’t get carried away.  We expect implied volatility (IV) to remain at or move up from current levels. A strong closing today  can offer in a ray of hope till then it would be wise to remain vigilant and avoid risky bets.

Ø  Till the time Nifty is trading above 5,200 we can expect some bounce back or relief rally to 5,300-5,350 levels. A breakout above 5400 could lift the Nifty further up. Overall, it is likely to trade in a range of 5200 and 5400 in the immediate term.

Ø  The FIIs were net sellers of Rs 8.6bn in the cash segment on Tuesday while the domestic institutional investors (DIIs) were net buyers of Rs 4.19bn, as per the provisional figures released by the NSE.

Ø  Wipro will be in focus as its Q4 FY12 net profit stood at Rs 14.81bn versus Rs 14.56bn in the preceding quarter.

Results Today:

Sterlite, Lichsg, Yes Bank, Bel, India Cements, IBreal; OberoiRealty EID Parry India, BASF India, Raymond, HCL Infosystems, Zensar Technologies, Supreme Industries, Mahindra Holidays & Resorts India, Alembic Pharmaceuticals, Kirloskar Brothers, Indo Rama Synthetics (India), Motilal Ostwal Financial Services, Rain Commodities, Foseco India, Indo Rama Synthetic (India), Tata metaliks, Tinplate Company of India.

Global Data Watch:

Japan machine tool orders, UK Nationwide Consumer Confidence (Mar), UK Q1 GDP data (provisional), UK index of services, US Durable Goods Orders (Mar), US Federal Reserve Interest Rate Decision and Ben Bernanke's press conference.