Weekly Newsletter - Oct 9 2009

The market continues to be volatile as the main indices consolidate after hitting multi-month highs. The Sensex and the Nifty erased all of the previous week's gains amid nervousness about the results. The Reliance bonus announcement and Infosys' strong results cum guidance too could not counter the jitters with regard to high valuations and an uncertain external situation. Liquidity flows from FIIs have also turned choppy lately. The performance of the stocks post IPOs haven't been all that inspiring either. The outlook has turned a little murky after a seven-month rally as most players are reluctant to take fresh bets in the absence of fresh good news.

One might just get some good news though next week when the IIP data for August is released on Monday. The industrial output grew by 6.8% in July after an impressive 7.8% gain in June. A top government official sees IIP at double-digits by December. What impact it will have on sentiment remains to be seen, as this could increase the chance of rate hikes by the RBI, especially if inflation too starts spiking.

On Tuesday, the market will be shut due to the Maharashtra state assembly polls. Next week also marks the start of the annual festival of light - Diwali. The bulls will be hoping that goddess Laxmi showers her blessings on the market. The traditional Mahurat session will be held on Oct. 17.

Meanwhile, the result announcements will only gather momentum keeping the market on tenterhooks. Among the top companies declaring their results next week are: Axis Bank, DCB, Exide, Praj Industries, Sintex, HDFC, HDFC Bank, Bajaj Auto, JP Hydro, Concor, Infotech Enterprise, Motilal Oswal, Parsvnath, KPIT Cummins, Wyeth, GTL Infra, TCS and UltraTech Cement.

In the US the economic reports to watch out for are retail sales, FOMC minutes, CPI, industrial production and consumer sentiment.