Weekly Newsletter - Feb 20 2012

With the liquidity flow continuing relentlessly, indices have no other way but to look up. The truncated week could see some wild swings though. The left out feeling is there in some quarters and a few are wary of the sudden rise and may prefer to sell into the strength. The week will give some opportunities to get in as the global macro factors could cause a temporary cooling anytime.

Among the global factors to watch out for there is Greece which is showing signs of pressure as the country faces a March 20 bond redemption totaling 14.5 billion euros ($19 billion). While the nation’s political leaders have signed up for fiscal retrenchment and detailed 325 million euros in new budget cuts for this year, euro-area governments have yet to approve a second bailout of 130 billion euros



Also, ECB's second tranche of the LTRO is due at the end of February and many see at least a similar take-up of funds as was seen in December. It may be recalled that more than 500 banks across Europe borrowed €489bn from the ECB at 1% in December

On the domestic front, the Govt will announce GDP data for the fiscal third quarter.

The F&O expiry on Thursday will ensure that the week sees the indices swinging in and out of negative zone. Ride with caution.