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Sunday, January 16, 2011

Weekly Newsletter - Jan 16 2011


All hopes of a comeback were dented by the downbeat IIP and December inflation reports. Infosys' subdued results and muted guidance didn't help matters either. A lot of results are still due in the next few weeks. Hopefully, they will provide the market something to cheer about after two back to back weeks of steep fall.



But, there is no escaping from the fact that the macro-economic outlook has dimmed a little in the face of spiraling inflation, hardening interest rates, worsening external account, FII outflows and political impasse. The sentiment has turned sour and the intermediate downtrend could last a bit longer before there is a reversal.

US markets will be shut on Monday for the birthday of Dr. Martin Luther King Jr. Eurozone worries have ebbed after successful debt auctions in Portugal, Spain and Italy. China's decision to hike the banks' reserve ratio by 50 bps and Chinese President's US visit will have a bearing on global mood. A string of key Chinese data will also be out next week.