Lacking conviction

Markets test patience and reward conviction

A choppy session ended on a good note on Wednesday. But conviction seems to be lacking at these levels. A flat start is what we expect. Thereafter, the market will react to the news flow of the day and of course global cues.



The Cabinet Committee on Economic Affairs (CCEA) is set to meet today to decide on the Direct Tax Code and import duty on power equipment. So expect some action on these counters.

The Bank Nifty hit a 52-week high and could soon lose interest at these levels. While FIIs have maintained their inflow, domestic funds and insurance companies seem to be safely booking profits at more than regular intervals.

Even as large, medium and small stocks have raced to their 52-week high in recent past, Reliance Industries, the index heavyweight which at one time could move the market has underperformed. In fact, it dipped in a rising market and touched its 52-week low on Wednesday even as the main indices hit multi-week highs.

Tata Motors accelerated on buzz of an increased weightage in the MSCI index. Besides the company is also planning a US$750mn DVR issue to retire its debt.

Besides a few results today, Ballarpur Industries could consider a dividend today. Royal Orchid will announce issue of NCDs etc on qualified institutional placement basis.

The US market managed another day of gains and Asia remains mixed for now. The Dow rose 10 points, the S&P 500 added 2 points while the Nasdaq composite rose 6 points. Absence of any major economic report seems to have kept the sentiment positive.

European markets closed lower, with France's CAC 40 dropping 0.4%, the FTSE 100 in Britain falling 0.9% and Germany's DAX losing 0.3%.