Sedate start; adjusting to weakness

Life at any time can become difficult: life at any time can become easy. It all depends upon how one adjusts oneself to life. – Anonymous. Welcome to a truncated week. The opening is likely to be a sedate after stocks in the US and Europe closed lower on Friday. Asian markets open for trading are in the red. Markets in China, Hong Kong, South Korea and Australia are shut. Chinese markets will remain closed for the entire week while in Hong Kong there won’t be any trading till Thursday. The Indian markets will remain closed on Tuesday on account of the Gandhi Jayanti. Watch out for data on manufacturing PMI and Exports, besides monthly auto volumes today. Also, the Shome panel is due to submit its report on GAAR later in the day. Meanwhile, the Kelkar Committee has come out with its report on Government finances and what needs to be done to contain the spiraling fiscal deficit. There is some good news in the form of a drop in the current account deficit for Q1 FY13. Globally, two separate reports on China’s manufacturing show continuous contraction. Mood among large Japanese manufacturers is also glum while South Korea’s exports are down as well. Events to keep on one’s radar include Ben Bernanke’s speech, global manufacturing PMI data, monetary policy review by central banks in Australia, Europe, UK and Japan. The monthly US non-farm payrolls report due on Friday will be another crucial data to keep an eye on. An appearance of a ‘Doji Star’ on weekly candlestick chart for the Nifty shows some signs of indecisiveness at current levels. However, the bias remains positive as long as Nifty holds above the horizontal breakout line of 5630. The implication of top being formed in Nifty will be confirmed on a weekly close below 5630; till then dips should be used as a buying opportunity. Trend in FII Flows: The FIIs were net buyers of Rs 12.30bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers of Rs 6.79bn, as per the provisional figures released by the NSE. The FIIs were net buyers of Rs 9.48bn in the F&O segment on Friday, according to the provisional NSE data. The foreign funds were net buyers of Rs 6.3bn in the cash segment on Thursday while the Mutual Funds were net sellers of Rs 1.8bn on the same day, according to the SEBI figures. Global Data Watch Today: Australia Labour Day, China National Day, Australia TD Securities Inflation (Sep), China NBS Manufacturing PMI (Sep), Japan Vehicle Sales (Sep), UK Halifax House Prices (Sep), Spain Manufacturing PMI (Sep), Italy Markit Manufacturing PMI (Sep), France Markit Manufacturing PMI (Sep), Germany Markit Manufacturing PMI (Sep), EU Markit Manufacturing PMI (Sep), Italy Unemployment (Aug), UK Markit Manufacturing PMI (Sep), UK Consumer Credit (Sep), UK M4 Money Supply (Sep), UK Mortgage Approvals (Sep), UK Net Lending to Individuals (Aug), EU Unemployment Rate (Aug), US Markit Manufacturing PMI (Sep), US Construction Spending (Aug), US ISM Manufacturing PMI (Sep) and US FOMC Member Williams Speech.