Weekly Newsletter - June 13 2010

After ups and downs this week, the Sensex and Nifty managed to close above the psychological levels of 17,000 and 5100 levels respectively. The two main indices recovered from early week's hiccups on the back of encouraging economic data from across Asia. Next week could turn out to be rather subdued and sideways as economic reports are fewer. Also, the market may take a pause ahead of next month's corporate results even as uncertainty prevails over the health of the debt-plagued European economies. The latest data from the US are a bit of a mixed bag, with retail sales falling for first time since September 2009 and consumer sentiment advancing.



Monthly, inflation for May will be announced on Monday. It is expected to either ease from 9.6% in April or remain steady. Nevertheless, some concerns remain on high food inflation although a good monsoon could have a softening effect going ahead. On the whole, the data may not have any material impact on sentiment. Another key variable to watch will be the fund flows, which have tapered off in the past several weeks. Monsoon's progress will also be keenly followed. We expect the market to face resistance at higher levels unless global markets remain firm.