Sentiment in disarray

All progress is precarious, and the solution of one problem brings us face to face with another problem. - Martin Luther King, Jr.

Well, the Indian market hasn’t made any progress whatsoever in the two weeks of 2011. On the contrary, it has lost quite a bit of ground, with back-to-back weeks of heavy losses. A spate of headwinds has taken a big toll on sentiment and the same is reflected in FII outflows.



Inflation is by far the biggest bugbear. The Government and the RBI are under pressure to take decisive steps to conquer the menace. The petrol price hike obviously doesn’t help. The fact that diesel and LPG prices have been left untouched is even worse. Reports say an emergency EGoM on fuel prices is scheduled this week but don’t bet on it till it actually materialises.

Today’s start could be higher but going by the trend of the past fortnight one can’t be sure if the turbulence is over. Avoid getting trapped in any relief rallies and wait for some more stability before taking a fresh plunge.

Results Today: Axis Bank, Essar Oil, Gravita India, IndusInd Bank, Kalyani Steels, Kernex Micro, L&T, PFC, Rallis India, RPG Life, Ruchi Soya, TCS, Zensar Tech and Zydus Wellness.

Tata Steel’s FPO hits the street on Jan. 19.

ADAG stocks like Reliance Infrastructure and Reliance Power could take a hit after SEBI barred the two companies from investing in the secondary market till December. Other ADAG stocks might also fall.

US stocks rose anew on Friday, with the Dow and the S&P posting seventh straight week of gains. Financials advanced on the back of JP Morgan's strong earnings. But Intel stock fell despite robust earnings and outlook. Economic reports weren’t that great with a preliminary reading of consumer sentiment for January unexpectedly falling. Wall Street may see some correction after the recent rally. Wall Street will be shut on Monday on account of the Martin Luther King day holiday.

Chinese stocks were down after the hike in reserve requirement that was announced late on Friday. The Hang Seng too is in the red. On the other hand, a weaker yen is powering a modest rally in Japan.