Pre Open Thoughts: The May Pattern

Pre Open Thoughts: The May Pattern

Ø  Mock not the fallen, for slippery is the road ahead of you. Things have turned a little sour for world equity markets in May. Investors seem to have taken the old axiom of 'sell in May and go away' seriously. The slide is likely to persist at least at the start.

Ø  The Indian market seems to be on a slippery slope more or less in tandem with world equity markets. The eurozone  situation  continues to threaten to spiral out of control.

Ø  The dollar’s sudden upsurge has also had a bearing on risky asset classes. Add to that domestic headwinds like inflation and policy stalemate on key issues, and you have a heady cocktail. Technical and derivative indicators are not supportive either.

Ø  We advocate caution in the short term as Nifty trades below 5000 here could be a minor bounce after a steep selloff but don’t aggressively buy into it as there could be further weakness. Volatility could escalate from here on.

Ø  The FIIs were net sellers of ~Rs 3.99bn in the cash segment on Tuesday while the domestic institutional investors (DIIs) were net buyers of Rs 2.57bn, as per the provisional figures released by the NSE.

Results Today:  

Ranbaxy ; PNB; IRB; Arvind; NIIT ;GVKPIL , Triveni Engineering & Industries, Vardhman Textiles, TV18 Broadcast, ABB, Gammon Infrastructure, Zuari Industries, United Breweries (Holdings), Mangalore Chemicals & Fertilizers, Uttam Galva Steels, Union Bank of India

Global Data Watch:

Japan Leading Economic Index (March), Japan Coincident Index (March), Japan Current Account (March), Japan Trade Balance – BOP Basis (March), Germany Trade Balance (March), Germany Current Account (March), Germany wholesale price index (April), US Wholesale Inventories (March), US Fed Minneapolis’s Narayana Kocherlakota's speech.