Tired after a climb

"When we are tired, we are attacked by ideas we conquered long ago" - Friedrich Nietzsche. Investors are taking a breather after the recent rally, which means large-cap stocks may remain rangebound before making a decisive move. The broader market seems to be showing more signs of life though this category warrants extra caution. What we have in store is a lower opening. Stick to a stock-centric approach as the main indices may consolidate. Things may turn wee bit volatile ahead of Thursday’s F&O expiry. Global cues are again weak. Asian markets are mostly in the red. US markets closed at a two-week low following a Fed official's hawkish comments. Earlier, US stocks had gained in the wake of encouraging data on consumer confidence and home prices. Global growth concerns continue to undermine central bank inspired optimism. IMF MD Christine Lagarde says there is an 'urgent need' for eurozone policymakers to fulfill promises on quelling the debt crisis. Anti-austerity protests hit Madrid ahead of the announcement on Budget, which may include more spending cuts. Meanwhile, Chinese stocks remain under pressure amid worries about slowing growth. The main Indian stock indices ended on a flat note on Tuesday with the Nifty trading in a narrow range of 5660-5720 to form a ‘doji star’ on candlestick chart. There is a hint of indecisiveness at higher levels after a one-side rally. A consolidation may be on the cards while the trading range is likely to get extended to 5600-5750. Trend in FII flows: The FIIs were net buyers of Rs 58.45bn in the cash segment on Tuesday. This includes the big chunk of shares sold by Cairn Energy Plc in Cairn India. The domestic institutional investors (DIIs) were net sellers of Rs 13.74bn, as per the provisional figures released by the NSE. The FIIs were net sellers of Rs 5.28bn in the F&O segment on Tuesday, according to the provisional NSE data. The foreign funds were net buyers of Rs16.52bn in the cash segment on Monday while the Mutual Funds were net sellers of Rs 6.3bn on the same day, according to the SEBI figures. Global Data Watch Today: Germany's Consumer Price Index (Sep), Germany Harmonised Index of Consumer Prices (Sep), France Consumer Confidence (Sep), Italy Retail Sales (July), UK BoE Credit Conditions Survey (Q3), Germany 10-Year Bond Auction, UK CBI Distributive Trades Survey - Realized (Sep), US MBA Mortgage Applications (Sep 21), US New Home Sales (Aug) and US New Home Sales Change (Aug). Important News To Ponder: Cautioning against over-dependence on FIIs, chief economic adviser Raghuram Rajan on Tuesday said that the Government should focus on FDI. The Indian economy is likely to grow by 5.5-6.5% in FY13, Raghuram Rajan said. Maruti Suzuki has announced a bumper increment package in a new wage settlement agreement, offering salary increment of nearly 70%, according to reports. The Director General of Civil Aviation is reportedly monitoring the financial health of Kingfisher Airlines along with other procedural lapses. Deputy Governor Subir Gokarn says that the RBI will look at how the Government is addressing these economic stress points by the next policy meeting. "It is the evolution of these responses that is really going to shape the growth and inflation trajectory," he says. Venezuela will hike the amount of oil it is sending to Reliance Industries (RIL) and has signed a new 15-year supply contract with the company. Budget carrier IndiGo has become the third airline to offer up to 40% discounts on a month's advance booking. Air India and Jet Airways did so a few days ago. Petrol prices may now change every week or 10 days but the hike is unlikely to be more that a rupee per litre, reports say. Reliance Industries (RIL) is likely to bid for mobile telephone spectrum in the upcoming auction, according to reports. Telecom minister Kapil Sibal has reiterated that the telecom industry would move to the unified license regime from 2013 wherein spectrum would be de-linked from licenses and license would be given on a nationwide basis. HDFC Bank on Tuesday said it will decide on a possible interest rate cut later this week. Global Developments: In a speech prepared for delivery in Philadelphia, Federal Reserve Bank of Philadelphia President Plosser said that the central bank’s latest round of monetary easing was unlikely to help growth. "We are unlikely to see much benefit to growth or to employment from further asset purchases," Plosser said. US consumer-confidence gauge climbs to seven-month high. The Federal Housing Finance Agency reported a 0.2% gain in US home prices in July. Separately, the S&P/Case-Shiller 20-city composite showed home prices rising for a fourth straight month. Following a meeting with German Chancellor Angela Merkel, European Central Bank (ECB) President Mario Draghi said that while the ECB's latest efforts are supporting financial markets, they must be coupled with "decisive measures by governments to address fundamental challenges and complete the euro area's institutional architecture." Meanwhile, German Chancellor Angela Merkel, at an event with the BDI Federation of German Industry, said that financial markets are worried some euro-zone countries may not be able to repay their debt, reports said. She further highlighted that it was premature to talk of banking recapitalisation through European mechanisms, before a supervisory body is in place, reports said. A German tabloid reported that the Bundesbank will challenge the legality of sovereign-debt purchases by the ECB. ECB Governing Council Member Ewald Nowotny, however, said that the central bank's plan to buy bonds is in line with European Union law and within the central bank’s mandate. Separately, Standard & Poor’s Ratings Services cut its economic forecast for the eurozone in 2012 and 2013.