Weekly Newsletter - Oct 8 2011

Indian stock indices lost 1% each in a holiday-shortened but choppy week. If it wasn’t for Friday’s strong rally, the losses could have been deeper. Friday’s bounce was fueled by optimism that European authorities will take decisive steps to address the region’s credit crisis. New monetary easing measures taken by the ECB and the BOE also helped bolster investor confidence.



However, a series of downgrades by Moody’s, including that of Italy and lack of consensus among eurozone members served as reminders that the worst is still not over for global markets. Expect some more pain if the solution to the eurozone problems remains elusive. The US is also battling its own economic demons that may cause harm to the investors’ morale.

For India, next week will be an important one. Three "I’s" could determine the markets’ mood. They are: IIP, Infosys and Inflation. So, be careful and cautious. Extra vigilance is called for given the volatility and uncertainty in world markets. Stick to stock centric approach and invest only after proper due diligence.