Weekly Newsletter - Oct 30 2009

The bulls appear to have lost their appetite for stocks this week. A tumble of over 5% for the main indices and nothing spectacular in terms of earnings have weakened sentiment for the immediate term. The RBI has also signaled the beginning of ‘EXIT’ through its indirect measures announced in Tuesday’s monetary policy.

With most major results out of the way by tomorrow, the Indian market will continue to watch the global cues closely for its opening. Inflation, which remains a worry is expected to continue its ascent. A truncated trading week may save bulls the usual Monday blues. On Tuesday, the bulls and bears will come in fresh with a host of global and domestic news flow to catch up. A clear trend is unlikely unless the global cues see some firm direction. Till then, play along each day at a time.

Given the weakness in the overall sentiment, coupled with a truncated week, we expect further downside in the market. It is advisable to wait a while for a clear trend before committing your money. Any crash could be used to get into the fundamentally sound larger companies