Swapnil Suvarna expects the RBI policy review, quarterly
corporate results and institutional investors to influence the market this
the board buying by institutional investors and better than expected Q3 2011 earnings by
index heavy-weights set the tone for domestic markets. The domestic markets ended
the week 4 percent higher with the Sensex and Nifty closing at 16,739 and 5,049,
week started off on a flat note following the S&P downgrade of nine euro-zone
countries, which further escalated worries of the euro debt crisis. Domestic
markets gained momentum after inflation (wholesale price index) cooled off to
7.47% in December 2011. The figure, being the lowest since December 2009, accelerated
hopes of rate cuts by the RBI. Alongside, China’s better-than-expected 8.9%
growth in the December quarter reinforced the uptrend.
markets slipped after FM raised concerns on the fiscal deficit target and the
World Bank slashed its global growth forecast. The market saw a rebound led by
buoyant performance of index heavy-weights in the December 2011 quarter
earnings. Reports that the International Monetary Fund (IMF) plans to raise its
lending capacity by as much as $500 billion to safeguard the global economy
from the euro-zone debt crisis boosted investor confidence. Moreover, successful
France and Spain bond auction eased worries of debt crisis in the euro-zone and
positive US economic data raised hopes of recovery in the economy.
The Week Ahead
With the general consensus being on the RBI
will keep the key lending rates firm in the third quarter review of monetary
policy 2011-12, scheduled for 24 January, the domestic markets are expected to
remain in the positive territory. However, much will depend
on the quarterly results and actions of institutional investors.
in the euro-zone will be closely watched by investors as 27 members from the
European Union’s (EU) are expected to meet on 23 January 2012.
suggesting your clients to invest in quality equity funds and not be influenced by the prevailing
negative sentiment in the market