Black diamond enters the street!

Diamonds are nothing more than chunks of coal that stuck to their jobs.- Malcolm S.

The IPO buzz will hit a crescendo with the high c-ash content Coal India issue. It will open on Oct. 18 and will close on Oct. 21. While some fear that investors will liquidate shares to subscribe for India’s biggest IPO others are confident that there is enough liquidity available to take care of this issue.



The start today is expected to be a positive one with most world markets in the green. The market may digest the nasty IIP surprise as it gears up for the latest batch of earnings. Inflation for September and Infosys results are due on Friday. A few small-cap and mid-cap numbers will be out today.

In the US, companies like Alcoa and Intel have come out with better-than-expected results. But the focus is on the Fed, which is mulling second round of Quantitative Easing. The timing and size of it is uncertain as of now. Also, one has to see how effective it turns out to be.

Overall, our market may continue to be in consolidation mode. The momentum may pick up around Diwali but the upside appears capped for now. One should be careful with the key indices trading close to all-time highs. Avoid chasing high returns in the Small-Caps and Mid-Caps as it is fraught with risks.

We could see some more selling as the market is still looking slightly overbought, especially the index components. The key indices might consolidate this month after a spectacular September. But, the medium- to long-term outlook remains promising.

Shares of VA Tech Wabag Ltd. will get listed today.

Once QE2 happens, it will again flood the world markets with billions of dollars. That huge sum of money will chase higher and visible returns in emerging markets like India. Already, policymakers in these markets are a worried lot due to surging inflows. Some have already taken steps to rein in the inflows. The RBI may also do so if needed.

Arrow Textile, Elpro Intnl, Honeywell Automation, Jindal Poly, Marsons, Pioneer Embroideries, Riddhi Siddhi Gluco and Stone India will announce their results today.

The FIIs were net buyers of Rs4.55bn in the cash segment on Tuesday (provisionally), according to the NSE web site. Local funds were net sellers of Rs4.54bn. In the F&O segment, the foreign funds were net sellers at Rs6bn. The FIIs were net buyers of Rs11.11bn in the cash segment on Monday, as per the SEBI web site. Mutual Funds were net sellers at Rs2.6bn on the same day.