Stay calm, rough ride ahead!

Anyone can hold the helm when the sea is calm. – Publilius Syrus.

An indifferent start is in the offing owing to mixed global markets and nervousness ahead of the earnings season. We expect the undercurrent to be cautious given the global headline risks. Any material fall in volatility could auger well for the markets. FII flows will also be important. IIP, Infosys results and Inflation will be the three big events for the week apart from all the daily dose of news flow from the offshore markets.



Telecom stocks will be in focus ahead of the release of the New Telecom Policy. Maruti is another stock to keep an eye on owing to fresh labour troubles at its Manesar plant. Sun TV could be under pressure amid reports that the CBI has raided the Chennai premises of Dayanidhi Maran.

While the US jobs data was better-than-expected, sentiment on Wall Street was hit by a downgrade of Italy and Spain by Fitch. US stocks closed lower but European stocks gained, notwithstanding a string of downgrades by Moody’s. The rating agency has warned of a possible downgrade of Belgium.

French President Sarkozy and German Chancellor Merkel have reportedly agreed to recapitalize Europe's banks without clear details.

"We are determined to do all that is necessary to guarantee bank recapitalization," Merkel said at a joint news conference following the meeting.

"When it comes to recapitalizing the banks, our agreement with Germany is total," Sarkozy said, but added that details would be decided at a future meeting.

The package will be revealed by the end of the month, they said.

FIIs were net buyers of Rs 4.91bn (provisional) in the cash segment on Friday, according to NSE data. The domestic institutional institutions (DIIs) were net buyers at Rs 194.1mn on the same day.

FIIs were net buyers of Rs 24.37bn (provisional) in the F&O segment on Friday, according to NSE web site.

The foreign funds were net sellers of Rs 9.69bn on Wednesday, as per final SEBI data.