Market Report

It was a volatile session yesterday. Nifty(spot) almost touched 5100 and then drifted lower to end at 5062.Entire focus of the market is shifted to the EU crisis.EU stocks opened positive for the day and drifted lower when a senior German official said, ESM and EFSF cannot be run simultaneously and Eurobonds would intensify the crisis and not solve it.A poll by Reuters showed that France would lose its AAA rating within 3 months.

If on Tuesday it was Germany's factory orders which surprised the markets,yesterday it was Industrial production for the month of October.It came at 0.8% compared to the -2.7% decline in September. Bank of England and ECB meet today for the rate announcement and there is an expectation that ECB would cut rates by 25 bps.

India's Inflation data to be announced during the day.I expect it to be lower compared to the previous announcement.The drop is attributed to the roll back of fuel price hikes by the Oil marketing companies.Expect our markets to open negative tracking the Asian peers and a fall below 5040 on Nifty future will trigger further weakness.I don't think the inflation data will have any impact today on the markets.The interest decisions of both ECB and BoE will be announced after our market hours.I would advise avoiding overnight position for the day.

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Market Report

As the Markets around the World are expecting the EU leaders to deliver on December 9th, let me remind you of something from the past, On July 21st, the EU announced that the Crisis is almost solved,On October 26th, they announced the crisis is over, and here comes December 9th. I am not very optimistic about the December 9th meet. Any bad outcome from the meet means, S&P's downgrade.If Germany and France comes out with a credible solution by risking their fiscal situation, again there is a possibility of a downgrade. I would say, EU nations have stepped on a landmine and they expect a miracle to happen.

As Samuelson on his book on ,"Economics", says Recession usually lasts for 6-12months.So can we assume that we are already into recession or shall we call it a depression as some of you may argue that this down trend continues since 2008. Whatever you call it, the situation is not all rosy.Though the Italian 10 year yield had fallen below 6% yesterday and the German Factory output surprised everyone, I am more worried about the domestic problems we have.

Few days back, our own bonds, the 10 year ones, have touched 9% mark.Am sure our Government will find it very difficult to meet the fiscal target of 4.6% of GDP for 2011-12(FM admitted the same). The rupee is weakening at a rapid pace and I don't think RBI intervention is going to help.In the month of November , RBI intervened ,still the currency fell down by 7% in the same period and the reserves dropped by almost 80,000 crores.

With slow growth and higher inflation,it would be interesting to see, if RBI cuts the rates in its next meet on 16th December.If the rates are cut, it would trigger higher inflation again.And if the rupee continues to hover around the 52 mark against USD, the oil marketing companies would be forced to hike the fuel prices(BPCL said, it will hike the prices anytime soon). Adding fuel to the fire is the Iran tension which is sending the crude prices higher.So we may be forced to live with high inflation and slow growth-stagflation.This is worse than the 2008 situation for India.

Coming back to our markets, it is better to be a trader in this markets.I don't see any optimism in the near future, either from the global front or from the domestic front.Expect some of our companies to give a blow in the form of forex losses in the quarterly results.

There is a saying,"The great thing about the stock market is you always have a second chance to get better and learn from your mistakes".

So to get a second chance, you need to have a strict stop loss in place.

Have a Happy trading day!!

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World Markets

Dow futures up by 77 points.

FTSE futures up by 7 points.

DAX futures down by 4 points.

CAC futures up by 14 points.

Italy's PM Monti will be presenting 30 Billion dollar worth austerity measures.

Nikkei is up by 37 points.

Hang Seng up by 75 points.

Market Report

On Friday, Nifty and sensex ended up by more than 2% and a weekly gain of more than 7.3 % ,biggest weekly gains since July 2009. All the Banking stocks rallied as S&P assigns stable outlook to 10 Indian Banks.European stocks rallied on Friday expecting the EU leaders to come out with a more credible plan to come out of the financial crisis.US stocks ended almost flat amidst a decrease in jobless claims.Treasuries and US dollar rose indicating concern about this week's EU meet.

Keep an eye on the European developments, as on Friday morning the Asian markets and the European and Dow futures were flat to negative till 12 PM.But after the speech by the German Chancellor, the DAX and the CAC index futures were up by 1.5% which lead to a rally in our markets. US markets rallied on the EU optimism and with a good set of jobless claims,I expected it to close in the positive zone.But finally the markets ended almost flat as the dollar and treasuries rose.

As the volatility is moving up in recent trading days, have a strict stop loss and be prepared to experience the roller coaster ride.We rallied on the day, when our GDP came at lower levels compared to the same period the previous year.And US markets erased the gains on Friday when the jobless claims were better than expected.Be prepared for such gravity defying stunts.

Yesterday,around midnight Iran announced it had downed an Unmanned US spy drone and this came at a time when the tension is escalating between Iran and the European nations.Keep an eye on Oil prices.

Tomorrow is a trading holiday on account of Muharram.Avoid carrying over-night positions.

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Humor- European Debt Crisis

Alex sir's views.

Nifty has support at 4910 -4861

Resistance at 4972 and 5017.


Profit booking by noon is expected.

Market Report

All the global indices rallied for the day(US and European markets rallied on Wednesday) as China had announced a 50 BPS cut in its rates and the Central banks(FED,BoE,BoJ,ECB, Bank of Canada and the Swiss National Bank) announcement to contain the EU crisis. Our markets opened with a gap and could not sustain at higher levels.Among the sensex stocks, Bharti Airtel, Bhel, ONGC, Sun Pharma and HUL ended negative for the day.


For the past 6 months, KFA defaulted on payments to Mumbai Airport(MIAL) and it owes 90 crores to MIAL.MIAL plans to put KFA on a cash and carry basis from tomorrow.KFA said, it will not affect the flights in and out of Mumbai and the company will operate filghts as per the revised schedule announced recently.

Rupee strengthened against the dollar(Dollar fell against major world currencies). A move below 51 in Rupee may trigger sell-off in IT stocks. Though the Rupee is currently trading around 52 levels, expect inflation to be lower in the coming weeks due to base effect.The fuel price reduction is yet to be priced in. As long as the Rupee hovers around 52 levels, don't expect further price reduction in fuel prices as it means higher import costs for the Oil companies.


JPMorgan expects Australia's RBA To Cut Rates by 25 Bps in this month.

Eurozone's November PMI came at 46.4 lowest since June 2009. European indices ended in red for the day.

I would advise caution to the retail investors.Don't get carried away by rallies like this.If you remember, on October 27, S&P rallied 4 % on a new European plan but the gains did not sustain.Including Wednesday's rally, S&P rallied 9 times since 2008 by 4% and had fallen by 4%, 10 times in the same period.Trade with a strict stop loss.

Have a great weekend!!

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