Market View : 22-May-2012

RaahiShah Tue May 22, 2012 2:56 pm

We expect a positive start for Indian indices. Whether the early pop will sustain remains to be seen.

The ‘risk off’ trade is likely to take a backseat temporarily. The markets world over seem to be coming to terms with the fact that leaders in Europe could step up efforts to stem the long-running debt crisis. US stocks rallied on Monday. Most European markets inched higher in a choppy session, but Spanish markets remained under pressure due to its precarious fiscal condition. Investors will now look forward to the informal EU summit on Wednesday.

Asian indices are up smartly this morning after Germany’s finance minister was quoted as saying that the nation will focus on measures to boost Europe’s economic growth. We expect a positive start for Indian indices. Whether the early pop will sustain remains to be seen. The risk-reward ratio is still not favourable though a technical rebound is not ruled out after a series of weekly losses. Stick to a stock-centric approach. Look for beaten down companies with sound fundamentals, clear earnings visibility and good management.

The Nifty has been trading in a tight range of 4850-4950 and a breakout beyond this range could some solace in the near term.

Telecom stocks could be in focus on reports of DoT’s unfavourable recommendations on 2G auction.

Indirect tax collections grew by just 10.4% in April 2012, with customs’ collections down by 8.8% due to duty drawback outgo and cut in duty on petroleum products last year.

FDI in multi-brand retail could become a reality at least in a few Indian cities, with the Government reportedly set to revive its Cabinet proposal on the contentious issue.
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