Set to soar at start!

One can never consent to creep when one feels an impulse to soar. - Helen Keller.

A surprisingly aggressive monetary easing by Japan and strong growth in the US services PMI lifted the spirits across world markets. Expectations are mounting that the Fed and other central banks in the developed world may also have to follow suit to shore up growth. Risk appetite seems to have improved amid some evidence that double-dip fears may have been exaggerated.



We see a gap-up opening today on the back of a world-wide rally. But don’t get carried away as things might cool off a little later on. Action may heat up in the non-index counters but as always, remain extremely watchful.

With the dollar under pressure, risky assets like the euro, emerging market currencies and commodities are soaring. But gold is also hitting new highs as investors are still jittery about the global economic recovery.

For India the big concern is higher commodity prices, especially crude oil. Food inflation also remains elevated. So expect the RBI to take further measures early next month to check inflation.

Though the overall undercurrent remains strong, there might be some softening as the Sensex has gained nearly 14% in the past one to one-and-a-half month. The key indices are looking overbought in the near term but may resume their uptrend after some consolidation.

All eyes will be on the monthly US jobs data and other important global economic reports. Central banks in the UK and Europe will announce their interest rate decisions on Thursday. Besides, the earnings season also kicks off this week - both in India and the US.

The Nifty has strong support at around 6100-6080 and at 6000 in case the market corrects further. On the way up, it will meet resistance at 6250 before it heads north towards 6300-6350. Its all-time high stands at 6357.

Shares of Eros International Media Ltd. and Career Point Infosystems Ltd. will list today on the bourses.

The FIIs were net buyers of Rs6.7bn in the cash segment on Tuesday (provisionally), according to the NSE web site. Local funds were net sellers of Rs8.02bn. In the F&O segment, the foreign funds were net sellers at Rs17bn on Tuesday. The FIIs were net buyers of Rs19.18bn in the cash segment on Monday, as per the SEBI web site. Mutual Funds were net sellers at Rs3.52bn on the same day.