Market Commentary – July 22 – Stay Cautious

Swapnil Suvarna feels that markets will continue to remain volatile and recommends you to stay cautious.

As expected, the domestic market remained weak through the week though it gained momentum on the final day. The Sensex and Nifty closed the week at 18,722 and 5,634 gaining 160 and 53 points.

The week started off on a negative note as the European sovereign debt crisis weighed on the sentiments. Weak corporate results followed by comments from the finance minister Pranab Mukherjee that inflation would remain high between August-December 2011 pulled the markets further down. However, the markets finally gained momentum after the Euro-zone leaders confirmed a 109 billion euro debt package for Greece and promised similar assistance to Ireland and Portugal through reduced borrowing costs.

Week Ahead

The markets will stay range-bound ahead of the RBI monetary policy review on July 26. We suggest you to stay cautious as we could see some volatility during the week due to F&O expiry on Thursday. As always, continue SIP ping to avoid these short term uncertainties.