No signs of maturity yet!

Sign of maturity is not when we start saying big things but actually it is when we start understanding small things. – Anonymous.

The main indices are now hovering around 28-month lows. They did manage a pullback from lows on Monday while the volatile rupee closed above the 53-per-dollar mark. The start today is likely to be a better one. Asian markets are in the positive zone though US indices slid, with banks taking a hit. European benchmarks were mixed.

Swelling fiscal deficit, widening current account gap, high interest rates, slowing economy and policy inaction are forcing foreign investors to commit less to India. Lingering worries over the euro area debt crisis continue to play spoilsport as well.



It is tough to find many optimists willing to bet their money on Indian equities at the moment. Further downside is not ruled out as buying support is dwindling. Scary levels on the frontline indices are being bandied about. Things could improve a bit over the medium to long term, provided the Government signals and/or implements a few important steps to lift the pall of gloom.

Although the Nifty ended on a negative note, a hammer on Monday’s trading session has a potential to turn into a trend reversal pattern, provided it is followed by a higher opening. On the upside, 4675 could turn out to be an important resistance on a closing basis. Any move above the same would negate a ‘Head and shoulder’ pattern, paving the way for a relief rally. Till then, the mood is likely to remain cautious.

FIIs were net sellers of Rs 4.5bn (provisional) in the cash segment on Monday, according to NSE data. The domestic institutional institutions (DIIs) were net buyers of Rs 186mn on the same day.

The foreign funds were net sellers of Rs 10.77bn (provisional) in the F&O segment on Monday, NSE data shows.

FIIs were net sellers at ~Rs 1.5bn in the cash segment on Friday (Dec. 16), according to SEBI web site. Mutual funds were net buyers at Rs 859mn on the same day.

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