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Monday, January 23, 2012

Testing times ahead!


There can be no happiness if the things we believe in are different from the things we do. - Freya M Stark.

After a surprisingly solid start to 2012, markets will face their first real test this month. RIL will be in focus after its Q3 results left a lot to be desired. It remains to be seen if the share buyback manages to support the stock.

Weakness in RIL may spell some trouble for the main indices. The start today will be sedate at best. Quite a few important Asian markets are shut today on account of the Chinese New Year. Japanese shares are subdued.



US stock benchmarks finished at a six-month high on Friday. European indices snapped a four-session winning streak but were up for the week. Talks between Greek government and bondholders over a debt swap are in a limbo.

Meanwhile, European leaders will gather in Brussels to discuss remedy for the debt crisis.

The RBI is most likely to maintain status quo when it meets on Tuesday. The RBI’s US counterpart will review its policy at a two-day meet.

FII flows have been robust and therefore hold the key to further ascent in Indian equities. Earnings announcements will accelerate. Watch out for the F&O expiry on Wednesday as Thursday is a holiday due to the Republic Day.

US President Barack Obama is due to give his annual State of the Union address to Congress in Washington on Tuesday. The International Monetary Fund (IMF) in Washington will publish updates of its 2011 World Economic Outlook on the same day.

The World Economic Forum's Annual Meeting gathering kicks off in Davos, Switzerland and runs until January 29.

Mariano Rajoy, Spain’s new prime minister, is due to visit Berlin for talks with German chancellor Angela Merkel.

Greek debt talks have been ongoing for several days, with reports suggesting that a deal is close. However, the outcome remains uncertain ahead of Monday's eurozone finance ministers' meeting.

A team from the International Atomic Energy Agency (IAEA) is due to begin a three-day visit to Iran to discuss the country’s controversial nuclear programme.

The FIIs were net buyers of Rs 8.19bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers at Rs 6.14bn, as per the provisional figures released by the NSE.

The FIIs were net buyers of Rs 17.43bn in the F&O segment on Friday, according to the provisional NSE data.

The foreign funds were net buyers of Rs 6.97bn in the cash segment on Thursday, the SEBI data shows. Mutual funds were net buyers of ~Rs 96mn in the cash segment on the same day.

Global Data Watch: Australia PPI data, Canada leading economic indicators and eurozone consumer confidence.

Other Major Results Today: Ashoka Buildcon, Colgate Palmolive, Coromandel Intl, DB CORP, Electrosteel Cast, Federal Bank, Gail India, Geometric, Idea, Jyothy Labs, Kotak Mahindra Bank, KPIT Cummins, L&T, LMW, Maruti Suzuki, Phoenix Mills, Shree Cement, Sterlite Inds, Torrent Pharma and Vardhman Textiles.