Summer of discontent

Restlessness and discontent are the first necessities of progress – Edison.

It’s a ‘summer of discontent’ out there for the Indian market. FIIs seem less inclined to resume their shopping spree here, inflation remains elevated and policy making is in the doldrums. In addition, we have had to grapple with a couple of big ‘overseas blows’ in the form of the Japanese calamity and the MENA turmoil.



On the contrary, Wall Street has enjoyed a few really strong months, as the US economy gathers pace (courtesy QE 2). The eurozone remains a matter of concern even as China continues its efforts to slow its economy.

Just when India was starting to catch up with global counterparts, the momentum appears to be on the wane once again. Thankfully, we expect a positive start on account of the greenery around global indices. Remain on the guard as a softening could take place later in the day.

Be very selective in your stock picking and focus on the larger stocks. Keep your expectations a bit tempered lest you be disappointed. The short term prospects are neither rosy, nor are they dire. A rangebound yet choppy chart for the day lies in store.

From the technical perspective, the Nifty seems to be trapped in a jam. The broad trading range of 5200-5700 prevails. A break above 5450 could see some short covering kicking in. The index could head towards the 200-DMA around 5650 if that happens. On the way down, near-term support is likely in the 5280-5320 zone.

FIIs were net sellers of Rs 970.2mn in the cash segment on Monday, according to the provisional NSE data. The domestic institutional investors (DIIs) were net buyers at Rs 479.8mn on the same day. FIIs were net sellers at Rs 9.9bn in the F&O segment.

The foreign funds were net sellers at Rs 4.55bn in the cash segment on Friday, as per final SEBI data. Mutual Funds were net sellers at Rs 198mn in the cash segment on the same day.