Down to start with

"It is easier to pull down than to build up" - Latin Proverb.

Equities have done exceedingly well this month amid growing optimism about the health of the US economy. Fears of a hard landing in China have also been addressed to an extent. Falling borrowing costs for the debt-stricken euro nations have also helped.

But, the euro region is still not out of the woods yet. Greece is still struggling to secure more aid from international creditors to avert a default. Fitch Ratings has lowered the grades of Italy, Spain and three others. All eyes will be on today's EU leaders’ summit.



For India, the good news has come in the form of strong FII inflows and a few positive policy steps. Barring a few companies, earnings have not been too bad. The Nifty crossed 200-DMA but failed to end above the same. The Sensex is yet to breach it.

The near term support for Nifty is placed at 5065 levels which may be tested in the coming days. But, any dips should be used as buying opportunity. We expect some consolidation in the key indices but the momentum in mid caps and small caps may remains intact.

The start today will be down, as most Asian markets are in the red. The US and European markets settled lower on Friday. Watch out for fresh developments from Europe besides PMI data and the US monthly jobs report later in the week.

The political scene is likely to stay heated as state elections have kicked off. Manipur voted over the weekend while Punjab and Uttarakhand will go to polls today. Goa elections are slated for March 3.

Uttar Pradesh, India’s most populous state, will see a seven-phase election that will begin on 8th February and end on 3rd March. The results will be announced on 6th March.

The FIIs were net buyers of Rs 12.40bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers at Rs 7.08bn, as per the provisional figures released by the NSE.

The FIIs were net buyers of Rs 11.79bn in the F&O segment on Friday, according to the provisional NSE data.

The foreign funds were net buyers of Rs 11.72bn in the cash segment on Wednesday, as per final SEBI data. Mutual Funds were net sellers at Rs 2.09bn on the same day.

Major Results Today: 3M India, Allahabad Bank, Balrampur Chini, EID Parry, ENIL, GHCL, Glenmark Pharma, GMDC, Havells India, Indiabulls Financial, Indian Bank, Ingersoll Rand, Kansai Nerolac, LIC Housing, Mahindra Lifespaces, National Fertilizers, Novartis India, OBC, Punjab & Sind Bank, PVR, Uniphos Enterprise, United Phosphorus and Zee Learn.

Global Data Watch: EU Prime Ministers and Presidents meet to solve debt problems, Germany's CPI data, Germany retail sales, US personal income and US personal consumption reports.