Sunday, March 13, 2011

Key Pointers for the Week Ahead

The Markets lost 1.7 % over the week to close at 5445. The current week is crucial due to the RBI policy Meeting on the 17th of March as well Advance Tax figures due to be out. Lets examine what can drive the Markets this week.

1. the Advance tax figures for various companies will be out by the 16th. Expect them to be sluggish due to higher input costs over the past quarter.

2. The RBI Policy review on the 17th March should hike rates by another 25 basis points. Anything more ad the markets will react.

3. The Oil companies continue losing money due to under-recoveries. Petrol under-recovery is about Rs 4 and Diesel about Rs 11. Expect another round of petrol price hike. Diesel price hike can be ruled out due to upcoming elections.

4. Japan has suffered heavy losses in the earthquake. This may lead to debt raising by the Japanese government for re-building efforts. The Sovereign Debt crisis of the EU countries can raise its head again anytime.

5. We have spent about 30 trading sessions below the 200 DMA thereby almost confirming the start of a new bear market. Since Mar'09, we had gone under 200 DMA just once in May'10 and that too for 7 trading sessions.

6. The market is presently in a no trade zone. Decisive breakouts only above 5608 and below 5309, the post budget lows.

7. For the month of March, the FIIs have bought 11 crores and DIIs have bought 200 crores. This has resulted the markets moving up by bout 2 pc. We could see the quarter end window dressing of the Mutual Funds book, so expect the listless trading to continue unless something majorly negative comes up.

As we look at it there no major positive triggers to take the markets up from here and no major negative triggers right leading to a crash like situation. Decisive moves will be seen after Thursday and also as more evidence of damage to Japan gets uncovered.

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