Odds against us!

A recovery is not ruled out after the recent selloff. We expect the down-trend to worsen with medium term support for the Nifty likely at ~5370 levels.

If you don't prove yourself against the odds then how can you be worthy for the evens? - Anonymous.

World markets are going through yet another rough patch, with the Dow down for eight straight days. The S&P 500 is in the red for 2011. This is Wall Street’s worst losing streak since October 2008.

The initial euphoria over the US debt deal has given way to apprehensions about the health of the global economy. The eurozone credit crisis also keeps rearing its ugly head intermittently.

Risk aversion is on the rise, with the Swiss franc hitting record high versus the euro. Gold and government bonds too are seeing ‘flight-to-safety’ buying.

The opening is likely to be pretty weak amid a world-wide carnage. The rest of the day’s proceedings will hinge on how overseas markets perform. A recovery is not ruled out after the recent selloff.We expect the down-trend to worsen with medium term support for the Nifty likely at ~5370 levels.

Equities and other risky assets are not on the buying list for the time being unless you are willing to patiently wait it out. Stay lighter till the near-term uncertainties ebb. Given the global economic backdrop, India’s 8% GDP growth may not be that bad. Medium-to long-term investors could look at quality stocks at lower levels.

FIIs were net sellers of Rs. 2.01bn in the cash segment on Tuesday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net buyers at Rs. 1.39bn on the same day. FIIs were net sellers at Rs. 6.51bn (provisional) in the F&O segment.



The foreign funds were net buyers of Rs. 1.51bn in the cash segment on Monday, according to the final SEBI data. Mutual Funds were net sellers of Rs. 1.60bn on the same day.

Results Today: Bharti Airtel, Ceat, Hindustan Copper, Jai Corp., Maharashtra Seamless, Oberoi Realty, Standard Chartered, Swaraj Engines and United Spirits.


Global Data Watch: Australia's trade balance and retail sales, Services PMI data for major economies, Eurozone retail sales, US ADP employment data, US factory orders, EIA's US crude stocks data and ISM non-manufacturing report.

The IT sector will be in focus after Cognizant reported another stellar quarter. Wipro might take a beating after it lost the No.3 slot to Cognizant.

Moody's Investors Service late Tuesday confirmed the U.S.'s triple-A rating following the increase in its debt ceiling. However, the rating agency assigned a negative outlook on the rating.

But, Fitch Ratings put the US debt rating under a review as the nation’s debt burden increases at a pace that is not consistent with an "AAA" sovereign credit rating. The firm said it expects to complete the ratings review by the end of August.

Chinese credit-rating agency Dagong Global Credit Rating Co. on Wednesday downgraded US sovereign debt and warned of further such moves.

Meanwhile, a Chinese non-manufacturing index rose for the first time in three months in July, indicating that some pockets of the world's No.2 economy are not doing that badly despite a series of monetary tightening steps taken by the government to cool inflation.

A purchasing managers’ index (PMI) rose to 59.6 from 57 in June, the China Federation of Logistics & Purchasing said today. A reading above 50 indicates an expansion while any figure below it denotes contraction.