September 2012

Trading levels 10th / 14th September 2012 ....



Mr Draghi did fulfill market expectations …. Partially. He did not go the full distance ( did not cut interest rate ) under pressure from Germany. I believe that was prudent since Germany goes for elections in near future and Madam Merkel returning to power is of paramount importance for subsistence of EUROZONE.

There are still a few niggling issues like German constitutional court matter but if they get sorted out by next weekend, the European issues can be forgotten for next 2/3 months atleast.

As predicted the global markets and our market as well has bounced about 2 % and next week becomes very crucial for continuance of the rally.

For Indian markets, FED QE III is more important as that will push major money towards the Emerging Markets. Our rally beyond 5,000 is entirely liquidity driven as our macros are nothing to write home about.

AUSTALIAN markets have also dipped and now only NASDAQ is standing tall – thanks to super strength shown by APPLE.

On Monday we should have a sideways session – that is minimum expectation. If we surrender Friday’s gains, it will not augur well for the continuance of the rally in our market – irrespective of what happens to world markets.

Our PM has again shown his feet of clay … by deferring even the notional diesel price increase.

I would prefer a wait and watch approach for next few days before market shows a confirmed trend to move up beyond 5400.