Weekly Newsletter - Jan 8 2010

The end to the first trading week for 2010 was rather subdued as the bulls lost steam amid lack of fresh catalysts after a promising start to the new year. Last year's phenomenal rally also meant that investors were reluctant to take bets at the beginning of the year, especially with the earnings season just round the corner. A few concerns also remain on an impending reversal in the loose monetary policy by the end of the month. One will have to wait for a few months to know where exactly we stand as far as the economic recovery is concerned. The current strong data is partly owing to a low base of last year. Also, it has to be seen whether the dramatic pace of the recovery can be sustained going forward sans all the emergency stimulus measures.

Results too may not have a major bearing on sentiment as most good news on this front has largely been discounted. What will be of importance however is the commentary from company management on the outlook for the next few quarters. IIP data for November will be out on Jan. 12 and could provide more clues on the state of the economy. Inflation remains elevated and will continue to be a cause for concern. Markets would await monthly inflation data on Jan. 14 for indications on the RBI's policy action at its quarterly review on Jan. 29. Bond yields are hovering around 14-month highs. Top IT companies like Infosys will announce their results next week. On the whole, the market will remain choppy and rangebound.

Key Results Next Week: Dhampur Sugar, Exide, Piramal Lifesciences, Indo Wind Energy, Infosys, Mastek, Sintex, Usha Martin, Rallis India, DCB, Escorts, HDFC Bank, Renuka Sugars, Balaji Tele, IDBI Bank, IndusInd Bank, TCS, Axis Bank and UltraTech Cement.