Weekly Newsletter - July 10 2011

It was a fairly choppy week. The main stock indices gained ~0.5% each, thanks to a big rally on Thursday. Some of those gains were wiped out on Friday. More pain could be in the offing following a dismal US jobs report. Over the weekend, China will release its trade data and ECB president Trichet will deliver a speech.

US trade balance and FOMC minutes will be out on July 12. A spate of important Chinese statistics, including Q2 GDP report, will be issued on July 13. Fed chief Ben Bernanke will testify before the Congress. European banks’ stress-test results are due on July 15. A lot of other global data points will also be watched closely.

Back home, the Government will release IIP and inflation data next week while the pace of the results announcement will accelerate. Infosys, TCS, Bajaj Auto, JSW Steel, Canara Bank, Godrej Properties, LIC Housing and Coal India will declare their Q1 earnings.

Since the Nifty failed to close above 200-DMA, that level will be crucial from short-term trading perspective. It is expected to find support between 5500 and 5600. FII flows will be another key factor to keep in mind.