Jan 21, 2012

Market Update 21/1/2012

The markets have seen a rally of 9% from the beginning of this calendar year. The Nifty settled the week ending at 5048.6 while the Sensex stood at 16739.01. The markets seem to be carrying positive momentum and we could still see some further up movement.
One of the leading factors for this rally has been FII investment. While I don't have the exact statistics, the sharp rally seen in the Rupee is indicative that FII's are on a buying spree and that augurs well for the markets. Recent decisions by the Union Govt to open up FDI in Aviation have helped create an environment conducive for foreign capital. The Rupee currently stands at around 50.32 to the dollar. It's seen a sharp appreciation from the levels of 53 to the dollar. 53 is a strong support for the Rupee. 
We are also in the midst of the 3rd quarter results and most of the big names have disappointed the street(which was expected with the slowdown in the real economy). RIL's share buyback has helped lift the stock but that doesn't hide the fact that this season's results for the company have been poor. Investors are advised to keep a close watch on the results of the companies that they are monitoring.
The key event in the upcoming week will be the RBI's policy announcement on Tuesday. While I was expecting a rate cut, the news coming from key sources suggests that the RBI is likely to keep all the key rates unchanged.
The markets should continue to do well in the short term. There could be negative days due to profit-booking. RBI's policy will be a key event to look out for but nothing significant is expected. 
Gold remains steady at around Rs 27400 for 10 grams. It is expected to remain at these levels for sometime.

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