Bulls remain durable!

Going up too fast is never considered prudent. Stay cautious as the external environment remains fragile at best. Key regions like the US, Europe and Japan are just limping along.

Man must be prepared for every event of life, for there is nothing that is durable. - Menander.



The morning is bright and bulls have it just right, at start. US markets rallied on Friday on the back of encouraging reports on durable goods order and new home sales. European stocks followed suit. Asian markets are mostly up. The Nifty could touch 6100 and rise further due to the unbridled FII inflows. But, things have turned a bit volatile and the F&O expiry will lead to more intra-day gyrations.

Going up too fast is never considered prudent. Stay cautious as the external environment remains fragile at best. Key regions like the US, Europe and Japan are just limping along. If markets rise on one good statistics one day, there is always a chance they might fall on a bad report some other day.

On Friday, we will get monthly auto sales, exports and manufacturing PMI. A slew of global economic reports will keep vying for attention throughout the week as well. The focus will soon turn on October, which will be another important month as India Inc. will unveil its latest report card.

The Dow Jones Industrial Average is set for best September since 1939 but 74% of the Americans say recession is not over yet, according to a private poll. US President Barack Obama and legendary investor Warren Buffett also endorsed the same view last week. Watch the dollar closely because the US economy and its prospects are the center of world attention, along with of course the debt-strapped euro-zone and deflation plagued Japan.

Lots of IPOs have hit the street over the last few days and a lot more are likely to cash in on the upbeat undertone. But, one must be extremely careful while applying for these issues, lest one may have to repent later.

The FIIs were net buyers of Rs11.49bn in the cash segment on Friday (provisionally), according to the NSE web site. Local funds were net sellers of Rs8.79bn. In the F&O segment, the foreign funds were net sellers at Rs10.46bn. The FIIs have pumped in $4bn in September alone, taking their net investments for the year to over $15bn. Last year, the FIIs had poured in $17.5bn into Indian equities.

Mahindra Satyam and Tech Mahindra will be in focus after the former said it will delist its ADRs from the NYSE.