New highs…Yes We Can!

The latest monetary easing by the Federal Reserve, coupled with a slew of public issues will lift the overseas inflows further. Coal India’s blockbuster listing and Obama’s visit have added to the feel-good factor.

You need to overcome the tug of people against you as you reach for high goals.-Gen George S. Patton.




The festive spirit may linger on as far as the Indian market is concerned. The main indices saw new closing highs last week and the stage is set for them to register all-time intra-day highs this week. It could happen today itself given the upbeat sentiment underpinned by a robust economy, solid earnings growth and record FII inflows.


All said and done, valuations are getting a wee bit pricey. Therefore, one ought to be a little cautious and not get too carried away by headline-grabbing index levels.


The latest monetary easing by the Federal Reserve, coupled with a slew of public issues will lift the overseas inflows further. Coal India’s blockbuster listing and Obama’s visit have added to the feel-good factor.


Inflation too seems to be softening though it is still quite high. The RBI has hinted at a pause after six consecutive rate increases. All these factors put together point to continuation of the positive trend in the short to medium term.


The external situation is showing some signs of stability although it is still far from comfortable. Getting complacent is the last thing one should do right now. It won’t be a bad idea to lock in some gains once the indices hit new record highs.


Corporate earnings are drawing to a close. Among the key events to watch out will be the October WPI inflation numbers, the G-20 leaders’ summit in South Korea and Chinese macro-economic statistics.


The Nifty witnessed smart up-move last week, violating its interim peak of 6284 and closed well above 6300. This led to a formation of a bullish belt hold on candlestick. This has brought an end to the consolidation phase. The Nifty could witness accentuated buying once it pierces the all-time peak of 6357. In case of a further fall, the Nifty is likely to find support in the 6150-6200 zone.


Results Today: Aban Offshore, ARSS Infra, Eicher Motors, IDFC, Jain Irrigation, Jindal Saw, Nectar Lifesciences, Oberoi Realty, Parabolic Drugs, SBI, Vascon Engineers and Venkey's India.


FIIs were net buyers of Rs. 1.67bn in the cash segment in Friday's Muhurat Trading (provisionally), according to the NSE web site. Local funds were net buyers of Rs. 239mn. In the F&O segment, the foreign funds were net buyers at Rs. 3.65bn on Friday.