Weekly Newsletter - May 29 2010

After a long time, most equity markets in the world had a positive week. Although the start was quite rocky amid persistent concerns over the European debt crisis and geopolitical tensions, stocks staged a remarkable come back on assurance from China that it was not paring down its holding of euro-zone bonds. Even so, the undertone remains jittery and risk appetite will take time to recover fully amid lingering worries over the fiscal issues confronting the euro-zone. Some volatility is likely to persist depending on the newsflow, especially from the global markets. But, on the whole, things could turn out to be better and brighter unless some fresh bad news hits the markets.

The US markets will be closed on Monday due to the Memorial Day. But, back home, the Government will come out with the GDP data Q4 and FY10. Reports suggest the GDP data could surprise on the upside. Next week should also bring the latest update on the progress of the southwest monsoon. The market could rally further if the GDP figures and monsoon updates are encouraging. Beginning of the new month also means that we will get fresh manufacturing PMI data from across the globe. This particular data has been holding up well and may help restore confidence. Among the other data points to watch out for will be the monthly auto sales and the US unemployment data.