Lacking conviction

Constant repetition carries conviction. - Robert Collier

If only we could have a repeat of last week, which was particularly good one for Indian stocks. Tuesday’s trading holiday will make movement choppy with a slightly negative bias. The opening is set to be lower. Asian markets are quite subdued following a flat finish on Wall Street on Friday. European indices did close with decent gains.

Retail stocks will be in focus amid reports that the Centre has put the proposed opening of retail to FDI in cold storage. The parliament, which has been paralysed during the ongoing winter session, will resume on Wednesday. It is likely to be a stormy affair yet again.



There was buzz of a possible cut in CRR by the RBI due to tight liquidity ahead of the advance tax outflows. The central bank is unlikely to oblige before its policy meet in the middle of this month.

Globally, though US seems to be okay. The focus this week will be on Europe as lots of important developments are lined up. The biggest of them all will be the EU Summit on Dec. 9.

Leaders of Germany and France will meet on Monday to fine-tune the proposed fiscal integration for the debt-plagued eurozone. The issue is likely to be the focal point of the upcoming EU summit. Before that markets will digest the outcomes from the latest policy meetings in Australia, the UK and Eurozone.

A spate of economic statistics from China and the US will also have some bearing on world markets.

Greece’s parliament is due to give its final approval to tough austerity measures on Tuesday amid continued protests from trade unions. US Treasury Secretary Timothy Geithner is also slated to visit Greece this week. The international creditors of Greece are also scheduled to meet to clear the latest tranche of the original bailout.

Over the weekend, Italian Prime Minister Mario Monti unveiled radical package of spending cuts and tax increases, including unpopular moves like raising the country’s retirement age.

Last week turned out to one of best trading weeks in past two years with the NSE Nifty gaining more than 300 points partly on short covering. The Nifty closed at5050. Going ahead, 5000 will be an important near-term level to watch. The Indian markets can rise further if the Nifty can sustain above 5140 levels,which represents the resistance line of monthly flag pattern.

FIIswere net buyers of Rs. 5.96bn (provisional) in the cash segment on Friday, according to NSE data. The domestic institutional institutions (DIIs)were net sellers of Rs. 1.07bn on the same day.

The foreignfunds were net buyers of Rs. 10.13bn in the F&O segment on Friday, NSE data shows.

FIIs werenet sellers at Rs. 9.04bn in the cash segment on Thursday, according to SEBI website. Mutual Funds were net sellers of Rs. 2.42bn in the cash segment on thesame day.