Weekly Newsletter - Apr 25 2010

A normal monsoon, Greek taking EU-IMF loan package and strong earnings momentum - both locally as well as globally - should stand the bulls in good stead next week. However, F&O expiry could lead to some swings in the domestic market. The RBI's decision to hike interest rates in a gradual manner rather than go for a big-bang approach is another positive, at least till inflation spirals out of control. The central bank has hinted at inter-meeting revision in rates so the market is already prepared if such a move does come about. Results of course will continue to hog the limelight for a while as the annual results are generally a well spread out affair. If global markets don't throw up any further nasty surprise(s) there is a likelihood of some more upside. FII inflows should be closely followed as well. We continue to urge caution as there will be pressure at every rise. A guarded, stock centric strategy should be adopted to ride out the volatile consolidation phase. Technically, the NSE Nifty might touch 5400 provided there is positive, overall momentum. On the downside, support should kick in at around 5200.