Weekly Newsletter - Feb 15 2009

The bulls seem to have got on a winning track this week with the main indices gaining over 3.5% each. While Inflation below 5% was on expected lines, poor Industrial Production numbers is something the markets have yet to come to terms with. The gains were led more on hopes of some goodies from the government as the vote-on-account is presented in Parliament on Monday.

The $789 billion stimulus compromise is set to pass and go on to President Obama for his signature. Incidentally, the US Market is closed on Monday for the President’s Day holiday. So a lot of local factors will come into play for the Indian markets on Monday. Depending on the announcements, stocks will see momentum. We reckon real estate and banking could be in the limelight in case of any positive developments. The RBI too may get into action and announce some measures to prop up sentiment.

FIIs have been net buyers of Indian equities to the tune of Rs5.21bn this month. The worry is will it sustain for long. Any spurt this week could be used to get out of counters and re-balance your portfolio.