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BOUNCE BACK after a SETBACK

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After a deep correction of more than 8 odd percentage points, markets are now trying to bounce its way up. As we had believed the stocks have given a sharp bounce from these levels, especially those which had been beaten fair and square. I believe that watching the events this week, markets would remain choppy, however the RBI policy statement would be a key driver. Every time the debate arises that RBI policy’s so called rate hikes have been priced in, but I think this time it is different. Even though market participants expect something between 25-50 basis points hike, the mood of RBI going forward and its stance will be something to be watched out for.

Also the FED is supposed to meet this week for its policy. Although no major changes are expected in it, but a surprise cannot be ruled out in the markets. Being a short week for the markets, and also expiry day for the January contracts, volatility is likely to be the order of the week. So far the quarterly results have been mixed, but mostly it has been in line with the expectations, so it seems that no further fall in the stocks after the results suggests that most of the expectations had already been factored in.

Let us keep a strong watch on the RBI policy meet and the Fed meet, to take further cues for the markets, going forward.

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Written by Kunal Bothra

January 24, 2011 at 4:12 pm

Posted in Market Watch

Tagged with , ,