Downgrades ignored, flat start in sight!

What we anticipate seldom occurs; what we least expected generally happens.- Benjamin Disraeli.

The much-dreaded mass downgrades of struggling eurozone members by S&P hardly caused any ripples across world markets. In fact, Moody’s affirmed its "AAA" rating of France. S&P delivered another knock though by cutting the top rating of the eurozone bailout fund, EFSF.

European Central Bank (ECB) President Mario Draghi has downplayed the S&P downgrades but warns that the eurozone situation remains grave. Meanwhile, talks over how writedowns of Greek debt should be handled will resume on Wednesday after a brief pause last week.



China’s economy remains in the pink of health, with Q4 GDP growing 8.9% and 2011 GDP up by 9.2%. Reports due this week will show steady growth in the US.

Talking of data, inflation for December is along expected lines. But, the core manufacturing inflation is still sticky. A rate cut is ruled out for the time being.

The start today is likely to be flat to marginally positive. Asian markets are firm. European indices closed up as well. US markets were shut on Monday.

Reports say that the Government is contemplating few measures in the upcoming Budget to improve the investment climate. We hear that very often though in the run up to the budget.

TCS and HCL Tech will announce their results today.

The FIIs were net buyers of Rs 3.57bn in the cash segment on Monday, as per the provisional figures released by the NSE. The domestic institutional investors (DIIs) were net sellers at Rs 2.29bn.

The FIIs were net sellers of Rs 1.86bn in the F&O segment on Monday, according to the provisional NSE data.

The foreign funds were net buyers of Rs 3.64bn in the cash segment on Friday, the SEBI data shows. Mutual funds were net buyers at Rs 151mn in the cash segment on the same day.

Global Data Watch: UK CPI, UK retail price index, UK DCLG house price index, Bank of England Governor's speech, EU CPI, Germany ZEW survey, US New York Empire State manufacturing index and Bank of Canada policy meeting.

Results Today: Chambal Fertilizers & Chemicals, Zee News, Kajaria Ceramics, VST Industries, Maharashtra Scooters, Camlin, Electrotherm, Blue Star Infotech, Automotive Axles and Sterling Holidays.

ONGC and Oil India could be under pressure on reports that the Government could put a cap on the price at which they sell crude oil to state-run oil refiners.

Airlines might be in the spotlight as the Group of Ministers will take up the issue of allowing FDI in domestic carriers.

Telecom shares may also be in action on a report that TRAI has recommended a one-time entry fee of Rs 200mn for pan-India mobile license.

Maruti is likely to witness some movement on a report that it has hedged 80% of yen exposure on behalf of its vendors. Maruti is also likely to launch a compact version of its Swift Dzire entry-level sedan shortly.