Bitter trials continue!

What seems to us as bitter trials are often blessings in disguise – Oscar Wilde.

Blessings in the market are hard to come by for now. The bitter trials and tribulations continue even as a ray of hope appears in Europe. The ongoing hullabaloo over FDI in retail remains while the PM strongly, for a change, defends the move. Parliament has hardly functioned in the six sittings this winter session. The scenario may not change much, as the opposition to FDI in retail reaches a crescendo.

In fact, the Centre may have to brace for another political storm; this time over the proposed Lokpal Bill. Anna Hazare is not happy with a draft and has threatened another agitation. In short, political developments are likely to hog the headlines in the short term.



While the markets may keep one eye on New Delhi, the main focus will be on Q2 GDP data. Majority of forecasts see further drop with many predicting a fall below 7%.

US markets closed mixed to flat. The Conference Board reported that its consumer-confidence index in November rose by the most in more than eight years.. European indices gained marginally. Asian benchmarks are mostly in red.

FIIs continue to be net sellers while domestic funds are trying to counter that by buying in a weak market. Meanwhile, LIC has cut its investments for FY12 by a third to Rs 400bn, from Rs 600bn earlier.

It would be prudent to remain cautious given the downbeat sentiment and worsening macro-economic backdrop. Restrict your purchases to quality stocks and stagger your buying amid continued uncertainty.

A two-day meeting of eurozone finance ministers got underway on Tuesday. They have reportedly agreed on the terms to expand the firepower of the region's bailout fund. European Union summit is scheduled for next week as well.

The UK's new official forecast predicts slower economic growth and higher than expected borrowing. Italian bonds saw strong demand but yields hit new highs.

The ECB failed to fully offset its purchases of eurozone government bonds through a weekly money-market operation. Standard & Poor's has downgraded several global banks following a revision in its rating criteria for the world's 37 largest financial institution.

Moody's has warned that 87 banks across 15 of the 17 eurozone countries could face downgrades. S&P could lower the outlook on France's 'AAA' rating in the coming days, according to reports.