Harmony in the market

Happiness is when what you think, what you say, and what you do are in harmony. - Gandhi.

Happiness seems to be overflowing; this time even for the government. A lower court delivered a favourable verdict on the alleged complicity of P. Chidambaram in the 2G scam. Markets are likely to display similar relief today. The opening will be positive. Suddenly the prospects for equities seem to have brightened. FII inflows continue to be strong. The rupee too is gaining ground.

Hopes are also building on material improvement in governance and policy making. The Uttar Pradesh elections and the Union Budget will be two big events on the domestic calendar in the near term. Corporate earnings will continue to roll in for few more days.



Although the undercurrent is upbeat, one must exercise some caution as there could be minor hiccups. FY12 GDP forecast and IIP data will be released this week. The Nifty extended gains for a fifth straight week and convincingly closed above 200 DMA of 5200. With no signs of any trend reversal despite entering into an overbought position, the view remains positive with near term resistance at ~5500.

Meanwhile, the encouraging January jobs data propelled US indices to multi-year highs on Friday. Their European counterparts also rallied. Asian markets are mostly up this morning. All eyes will be on Greece as it faces stiff deadline on securing bailout funds.

Markets around the world will also tune into the latest policy announcements from the ECB and the Bank of England later in the week. Chinese data on inflation and trade balance will also be closely watched.

The FIIs were net buyers of Rs 10.74bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers at Rs 9.15bn, as per the provisional figures released by the NSE.

The FIIs were net buyers of Rs 1.93bn in the F&O segment on Friday, according to the provisional NSE data.

The foreign funds were net buyers of Rs 21.34bn in the cash segment on Thursday, as per final SEBI data. Mutual Funds were net sellers at Rs 1.13bn on the same day.

Major Results Today: Adani Port, Adani Power, BGR Energy, Bajaj Electricals, Dena Bank, GSK Consumer, Gujarat Industries Power, Gulf Oil, HUL, India Cements, Kesoram, MOIL, NALCO, NCC, Spicejet, Texmaco, Trent and Zydus Wellness.

Global Data Watch: Australia retail sales, UK house prices and German factory orders.