Market turn positive this week

Review of the Week ended 23rd Dec 2011.

The markets have turned positive this week putting an end to its two week loosing streak where we saw the markets shed more than 8-9 per cent of its value over a number of domestic and global macro economic concerns. The week started off on a negative note with negative flows coming in from North Korea over concerns raised by the sudden death of its leader and fears of its ill-effects on the region. However mid-week, a positive set of inflation internals for the week ended Dec 10 showing some significant signs of easing and a upgrade of our currency debt rating to investment grade with stable outlook by Moody’s Investor Services, led to a turnaround in market sentiments, which helped power a strong 500 point rally. In the end though there was a bit of volatility witnessed towards the end of the week, the markets still managed to close on a positive note.

On the global front, the US markets witnessed a great run for the week as equities extended their rally after a string of unexpectedly strong economic data. Investors cited recent improvement in U.S. economic data and seasonal factors behind the move, while a deal to extend the payroll-tax cut for two months added to the enthusiasm.

In conclusion, we expect the coming week to be highly volatile as investors and traders get ready for the December month end expiry. There are also some concerns surrounding the final outcome of the Lokpal bill for which the parliament closing date has been extended to 29th. FII’s will closely watch this development. One may also expect cement and auto stocks to be in action as they are expected to release their monthly figures by Jan 1st 2012. Also expect investors, traders and institutions to build on some expectations on what to expect in December quarter results.