A good start again!

Cease to ask what the morrow will bring forth. And set down as gain each day that fortune grants - Horace.

After a fairly dull July, the Indian indices had the fortune of kicking off August on a healthy note. A combination of robust domestic fundamentals and improving external scenario sent stocks soaring on Monday. It all started in Asia, where a slowdown in China’s manufacturing sector stoked expectations of a slow tightening. Europe picked up the cues after HSBC and BNP Paribas announced stellar results, and euro-zone PMI climbed. On Wall Street, investors cheered a less than anticipated fall in manufacturing PMI, while construction spending rose unexpectedly.



The start today again will be healthy. Most Asian markets are up marginally. A big question is whether this rally can sustain. Global cues will continue to be the critical factor, along with FII inflows and the remaining Q1 earnings. Going forward, IIP and inflation data will have a role to play in driving the sentiment. One word of caution: Monday’s rise came on low volume. So, one has to see how today’s session unfolds before jumping to any decisive conclusion.

Lot of developments is taking place on the political front, which the markets have chosen to overlook so far as risk tolerance is high. Monsoon seems to be getting better, though at some places there has been excess rainfall lately. Overall, India is on a solid footing even as other key regions of the world are still facing a few economic challenges. The US is growing slowly and that too due to extraordinary stimulus. Europe is on an austerity drive as it looks to rein in debts and deficits. Japan remains mired in deflation and China appears to be slowing down.

Results Today: Hindalco, Infinite Computers, NDTV, Plethico Pharma, Punj Lloyd, Spice Moblie, Swaraj Engines, Uflex and Welspun India.

FIIs were net buyers of Rs7.28bn in the cash segment on Monday (provisionally), according to the NSE web site. Local funds were net sellers of Rs1.7bn. In the F&O segment, they were net buyers at Rs18.58bn. On Friday, the FIIs were net buyers of Rs10.4bn in the cash segment. Mutual Funds were net sellers at Rs1.73bn on the same day.