Topsy-turvy movement

Success is not final, failure is not fatal: it is the courage to continue that counts. – Winston Churchill.

The Indian market is all set to resume what could be yet another week of topsy-turvy movement. The start is likely to be subdued given the mixed cues from the overseas markets. While US stocks managed modest gains, their European counterparts finished in the red. Asian indices this morning are in no-man’s-land. Japanese markets are shut for a holiday.



For India, the focus will continue to be on the latest batch of quarterly earnings. No major results are due today. FII inflows too appear to be tapering off a wee bit. The main indices likely have slipped into a narrow trading band. Stock specific action will continue to be the order of the day. The short point is one shouldn’t rush things and wait for more clarity on the outlook for India as well as world economy.

Sovereign debt crisis in Eurozone and the gridlock over budget will remain at the forefront aside from earnings. Risk tolerance is not particularly high, which shows in gold hitting new record. Nymex crude is hovering around $97 mark.

The NSE Nifty has been taking support at 100 DMA (5568 levels) lately. The near term trend could turn negative below 5550 with an intermediate support seen at 5440 levels.

The next big macro-economic event for India will be the RBI’s policy meet on July 26 where it is likely to hike rates by 25 bps.

FIIs were net buyers of Rs 730.3mn in the cash segment on Friday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net sellers at Rs 391.4mn on the same day.

The foreign funds were net buyers of Rs 3.37bn in the cash segment on Thursday, according to SEBI data. Mutual Funds were net buyers at Rs 5.43bn on the same day.

Results Today: BASF India, BOC India, GHCL, Goa Carbon, ING Vysya Bank, Persistent Systems and Zydus Wellness.

Keep an eye on Hexaware as the mid-tier IT company may announce a big order today.

Eight banks failed Europe’s second round of bank stress tests, with a combined capital shortfall of 2.5 billion euros. But, the exercise has been criticised yet again for being too easy to pass. It may not help shore up confidence in eurozone's precarious banking system.

More than 100 US companies in the S&P 500 index will report their quarterly results this week.

The debt ceiling debate is expected to continue to influence world markets. The deal has been in the works for quite some time now. US Treasury started sending letters to Congress back in January, urging lawmakers to raise the debt ceiling. Seven months have passed and yet there is no sign of any concrete agreement.

If the Congress fails to raise the debt ceiling, the US would be at risk of default. That, in turn, could worsen US debt and hurt jobs, two things lawmakers say they want to improve.