Weekly Newsletter - Oct 23 2010

Another week of consolidation has just gone by as the key Indian stock indices seem to be struggling for direction. Even the global markets are not doing a great deal as investors digest the latest corporate earnings amid prospects of further monetary easing by the Fed early next month. That will indeed be a big event that everyone will watch closely. China has just surprised the world by announcing rate hikes. Also, data this week suggested that the Chinese economy is moderating. The G-20 finance ministers will meet this weekend in South Korea ahead of next month's leaders' summit at the same venue. The G-20 meet comes amid a bitter global bickering over uneven trade and money flows hurting the recovery process. Nothing concrete is expected out of the G-20 meet this week as China continues to resist demands to let yuan rise more freely.

Coming back to India, the market may remain in a state of flux next week as well. The Diwali week is packed with big events with potential to move the markets either way at least temporarily. The policy meetings of the RBI and the Fed are scheduled in early November along with the US congressional elections and the Obama visit. Apart from that we will get the usual economic data early in the month. Results will continue to pour in from all corners of the world. Next week we will also have the F&O expiry for the current month's derivative contracts. One should remain cautious given the uncertainty over the near-term direction of the market. Stick to a stock-centric approach and avoid taking aggressive bets either way.

In terms of global data points, existing home sales, consumer confidence, durable goods orders, home prices, new home sales, GDP and consumer sentiment reports will be out nest week in the US. Statistics on UK GDP and Germany's CPI will also be announced besides BOJ's policy meeting.

REC, LMW, Titan, Mahindra Holidays, Amara Raja Batteries, Hindustan Media Ventures, Deepak Fertilizers, Dabur, Karur Vysya Bank, Bata India, Thermax, Trent, Patni, HT Media, HCC, ABB, Kansai Nerolac, M&M, Sona Koyo Steering, BPCL, AV Birla Nuvo, Maruti and Chambal Fertilizers are some of the big companies that will declare their results next week.