Weekly Newsletter - July 17 2011

Yet another eventful week has passed, with the key indices losing ~1.5% due to selloff on the first couple of days. Though there was a big rally on Wednesday, the momentum lost steam on the last two days. IIP, Infosys results and Inflation report soured the mood while the Cabinet reshuffle was a non-event. Bajaj Auto’s results also disappointed as its margins contracted. But, TCS reported blowout earnings and the management sounded extremely confident.



The coming week will see acceleration in the results announcements. Overall, the trend may remain sideways and choppy as market players digest the earnings and management commentary on the outlook. The next big macro-economic event will be the RBI’s policy meet on July 26 where it is likely to hike rates by 25 bps.

Monsoon and FII inflows could also have some bearing on sentiment. India has turned into a stock pickers’ market in the absence of any decisive direction. So, stick to a stock centric approach and take each day as it comes to avoid any major hit on your portfolio.

Globally, the focus will be on earnings apart from the sovereign debt crisis in the eurozone and gridlock over budget in the US.