Appropriate value!

The excellence of a gift lies in its appropriateness rather than in its value. - CD Warner.

Blindly looking at valuations is no longer valid in choosing stocks. Earnings estimates have already seen deep cuts with the bias remaining on the downside. There appears some hope though that the early January rally may sustain if crucial upcoming events are supportive.

The opening is likely to be more sedate as Asian markets are not exactly firing on all cylinders. US stocks lost some momentum after a gap-up start. European markets did exceedingly well though after Fitch said it is not planning downgrade of French "AAA" rating. China’s better-than-expected trade surplus was also in the play yesterday.



For India, the most eagerly awaited events this month is the January 24 RBI policy meeting. Reports suggest that the central bank may not cut the CRR. This may be a wee bit disappointing for the markets. However, one should not jump the gun and wait for the RBI announcement. Before that we have to contend with data on IIP, Inflation and Infosys results apart from the external developments.

Meanwhile, the prospects for the Indian economy continue to look rather glum in the face of mixed bag macro-economic numbers.

Moody’s has upgraded India’s short-term foreign currency deposit rating; Car sales rose for second month in a row and the SIAM projection for FY13 is not bad; Indirect tax receipts rose by ~16% in December; The Government has finally notified 100% FDI in single-brand retail but the a clause on local sourcing could play spoilsport.

On the other hand, fresh investment proposals (private as well as government) have plunged, There are reports of a drought in three major states, while consumer durables sales in 2011 have been pretty dismal as well.

The FIIs were net buyers of Rs 3.24bn in the cash segment on Tuesday, as per the provisional figures released by the NSE. The domestic institutional investors (DIIs) were net sellers at Rs 1.15bn.

The FIIs were net buyers of Rs 14.38bn in the F&O segment on Tuesday, according to NSE data.

The foreign funds were net buyers of Rs 124mn in the cash segment on Monday, the SEBI data shows. Mutual funds were net buyers at Rs 331mn in the cash segment on the same day.

Global Data Watch: Germany's GDP data, EU GDP data, UK trade balance, US mortgage applications and Federal Reserve's Beige book.

There are no major results today.