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05 Nov 2011 11:50 AM
Uncertainly prevails in the markets – caution advised 
Swapnil Suvarna
 

As expected, Indian markets remained weak last week due to global uncertainties and weak economic indicators. Swapnil Suvarna continues suggesting your investors to remain watchful this week as uncertainty prevails in the euro-zone.

As expected, the Indian markets remained volatile last week with the Sensex and Nifty closing at 17,563 and 5,284 respectively, declining 242 and 77 points.

The week started off on a negative note on fresh European concerns following the Greek Prime Minister’s call for a referendum on aid to the debt-stricken country and softer-than expected Chinese manufacturing data.

Angered by Greece’s shock move, to call a referendum on its latest bailout plan, the leaders of France and Germany told the Greek that Athens would not receive another cent in European Union aid until it decides whether it wants to stay in the euro zone. The French President added that the Greek government would not get the fresh bailout package if it lost the referendum. These developments saw the Indian market remain week.

Sharp jump in food inflation for the penultimate week of October coupled with a subdued reading on the nation’s service sector output weighed on the sentiments. Also, reports of another hike in petrol prices added to the woes.

However, the domestic markets finally gained some momentum towards the end of the week on reports of the Greek Prime Minister’s u-turn on a referendum and ECB interest rate cut of 25 basis points.

Week Ahead

We continue suggesting you to ask your investors to stay vigilant during the week as the developments in Europe remain uncertain after G-20 puts Italy under watch. Signs of negativity in global cues will lead to a decline. Concerns of rising interest rate, rising cost, slowdown in earnings outlook and unclear policy environment prevails in the domestic market.

During these conditions continue suggesting your investors to invest in quality equity funds and in short-term debt funds.

 
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