There are many things that we would throw away if we were not afraid that others might pick them up - Oscar Wilde.
Global markets have heaved a sigh of relief. European leaders have buried the hatchet to avert a possible split in the euro-zone and bolster confidence in the euro. Another major financial crisis has been avoided. But, it remains to be seen how fast the debt-ridden European nations can rebound from here on. A major task ahead of them is to overhaul their economic structures to return to sustainable growth while also keeping in check their high debt levels.
The global economic recovery has suffered a temporary setback. What that means is that the crisis-fighting stimulus will stay for some time to come in advanced nations. Even central banks in emerging countries like India may go slow in raising rates. The dollar may remain firm. Emerging markets with strong growth will benefit from ultra-soft monetary regime in western countries.
For the day, the outlook remains positive though the start will be lackluster. Asian markets are mixed. Stocks in China are up this morning, owing to strong set of economic data released today. The Hang Seng is in the red. Some choppiness is likely and the main Indian indices may once again slip into a rangebound trade. We would urge caution at these levels.
The NSE Nifty may face resistance at around 5250-5350 levels while on the downside support is expected to kick in at 4950-5050. One should wait till the Nifty achieves a decisive break out of this current range. A sustained move past 5400 or perhaps even 5500 may still take a while to materialise.
Global markets must remain fairly strong and there should not be any significant external accidents. Liquidity, which had dipped due to the European crisis, should also remain robust. In the immediate future, one needs to closely follow macro-economic data points like the IIP and monthly inflation. Both the reports will be out later this week.
Results Today: Bajaj Auto Finance, Bajaj Finserv, Bajaj Hindusthan, Havells India, Hindalco, Jain Irrigation, Jindal Drilling, Kotak Mahindra Bank, Ranbaxy and SREI Infra.
FIIs were net buyers of Rs2.64bn in the cash segment on Monday on a provisional basis, according to NSE web site. Local institutions were net buyers of Rs302.5mn. In the F&O segment, the foreign funds were net buyers of Rs26.8bn. FIIs were net sellers of Rs15.9bn in the cash segment on Friday, as per the SEBI data. Mutual Funds were net sellers of Rs137mn in the cash segment on the same day.