Pre Open Thoughts: No Seasonal Strategies!!!

Pre Open Thoughts: No Seasonal Strategies!!!

Ø  We cannot command Nature except by obeying her. The nature of the market is such that no seasonal strategies will work. There may be some adjustments to make especially during the initial hour. If you followed the Sell in May adage, you may be right for few months and there are years when people came back from May holidays only to find the indices racing ‘while they were away.’

Ø  Meanwhile India is forecast to receive average monsoon rains this year, that's the third straight year without drought. Rains during the June-September season are likely to be 99  percent of the long-term average. Though one has to keep in mind that initial forecasts have gone wrong in many ways.

Ø  As far as the S&P outlook is concerned, it does not aid sentiment in anyway but it was something that was expected. As far as GAAR is concerned, there has been much uncertainty on the modalities and the FII community cannot afford to be taken up the wrong way. The market's recent resistance will be tested if the Government continues to dither on reforms in the name of coalition compulsion. The cloudy outlook can improve if there is some movement on reforms in the coming days. The sooner clarity comes in, the better it is.

Ø  Govt  must understand that India is dependent on foreign capital for our markets and for other things and there is no reason why we should upset people who put in their savings and investments in this country.

Ø  We have to live with this and this morning doesn’t look very pleasant to begin with. The indices have been week for most part this week and the Nifty came down almost a percent as monthly derivatives contracts expired. The opening is likely to be subdued. The Nifty is hovering around its 200-DMA support levels.

Ø  Expect a range-bound day as investors should adopt a defensive strategy in view of the result season.

Ø  The FIIs were net sellers of Rs 3.76bn in the cash segment on Thursday while the domestic institutional investors (DIIs) were net buyers of Rs 634.9mn, as per the provisional figures released by the NSE.

Ø  Banking stocks will be in focus as The Indian cabinet has cleared banking laws (Amendment Bill 2011), and approved raising voting rights of stakeholders in private banks to 26 percent from 10 percent, in a long-awaited boost for the banking sector.

Results Today

ICICI Bank, Jindal Steel & Power , Axis Bank, Siemens  Hexaware Technologies, Hindustan Construction, Indiabulls Financial Services, Thomas Cook (India), Mahindra Lifespace Developers, Delta Corp, Kalindee Rail Nirman, State bank of Travancore, Kajaria Ceramics.

Global Data Watch:

Bank of Japan Interest Rate Decision, Japan CPI, Japan industrial production, Japan retail sales, Japan unemployment rate, Japan household spending, Japan housing starts, US annualized GDP (Q1), US Real Personal Consumption Expenditures (QoQ) (Q1), US Reuters/Michigan Consumer Sentiment Index (Apr), UK Nationwide Housing Prices (MoM) (Mar) and Germany Gfk consumer confidence.