Aug 17, 2012

Market Update 17/8/2012


The markets ended the week slightly positive. The technical indicators are in the over-bought region. We could see some profit-taking in the next few sessions. The Nifty is expected to consolidate at these levels in the next few days. There are no significant triggers on the horizon.

The ruling German coalition’s support to the ECB has been a big positive for the Global Economy. Markets worldwide have rallied on the news. Back home the markets are looking to Mr. Chidambaram to deliver on the long promised reforms in the monsoon session of parliament.

In debt, short term funds are expected to do well as most analysts expect a rate cut from the RBI during the later part of this calendar year. However, inflation continues to persist and if the Govt goes on to de-regulate diesel and LPG (to reduce the fiscal deficit) then it will only add to the inflationary pressures.

The rupee tested 56.1 to the dollar before recovering a little towards the end of the week. It is expected to remain in the same range as the market consolidates.

Gold has crossed the important level of 30,000 for 10 gms in the local market. Internationally the metal has been in a range between 1600-1625 $/oz. Global factors will continue to drive the price of gold. For the short term the price is expected to rise marginally.

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