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Tuesday, August 30, 2011

Appetite picking up!



Appetite, with an opinion of attaining, is called hope; the same, without such opinion, despair. – Thomas Hobbes.

The long hunger for gains has resulted in risk appetite picking up in equities during the past few sessions. After being on a slippery slope for quite a while, global stock markets are turning around. The recent fall was pretty ferocious and a lot of ground still needs to be covered. Whether the current recovery is sustainable cannot be ascertained. Wait for some more clarity and stability before committing larger amounts.



Meanwhile, the start today is once again going to be a good one. All indications are pointing to the Nifty crossing the 5,000 mark in early minutes. US equities rallied overnight and so did their European counterparts. Asian markets too have extended Monday’s gains.

The Banking & Finance space will remain in the spotlight after the release of new bank license norms and NBFC guidelines. (Read Nirmal Jain’s blog - Encouraging growth of NBFCs will reduce systemic risk considerably).

Unitech and ADAG shares may gain further after getting a reprieve in the 2G scam. Maruti is another stock to keep an eye on due to fresh labour unrest.

Q1 GDP data will be out today. Q1 FY12 GDP is estimated to be around 7.5% compared to 7.8% in Q4 FY11. India's economic growth stood at 8.5% during FY11, compared to 8% in the previous fiscal year.

World markets will have to contend with a lot of important economic statistics through the week, including the monthly US jobs report on Friday. For India, it is a truncated trading week. Indian markets will remain shut on Wednesday and Thursday on account of Ramzan Id and Ganesh Chaturthi.

FIIs were net buyers of Rs 3.66bn in the cash segment on Monday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net sellers at Rs 3.25bn on the same day. FIIs were net buyers of Rs 11.52bn (provisional) in the F&O segment.

The foreign funds were net sellers of Rs 966n in the cash segment on Friday, as per SEBI data. Mutual Funds were net sellers at Rs 507mn on the same day.

Global Data Watch: UK mortgage approvals, UK money supply, UK consumer confidence, EU consumer confidence, US S&P/Case-Shiller price index, US consumer confidence, FOMC minutes, Japan jobless rate, Japan retail sales and Japan household spending.