Weekly Newsletter - Sep 27 2009

The rising indices need some rest and the coming week offers plenty. With three working days, the bulls and bears may prefer to have some action on the street rather than remain on the sidelines. The US market seems to be lacking clear direction for now following mixed signals from data on consumer confidence, home sales and orders for durable goods. The outcome of the G20 Summit is unlikely to have a big impact. In any case, G20 leaders have reiterated their pledge to maintain the unprecedented stimulus measures unless there is absolute certainty over economic recovery.

Back home, the RBI too has made similar remarks, promising to keep the status quo to offset the adverse impact from a poor monsoon. For more on what the central bank will do one will have to wait till next month-end's half-yearly policy decision.

Though the base effect does come to play, the index of six core industries having a combined weight of 26.7% in the Index of Industrial Production (IIP) registered a growth of 7.1% (provisional) compared to a growth of 2.1% in August 2008. All eyes will now be on the August IIP data, which will be out on Oct. 12. By that time, one will have known the initial trends in quarterly results. Anticipation of better quarterly numbers may ensure that investors don’t get very light, lest they miss out another expected bull run.