Nifty 30th May to 3rd June

The smart up move from 5328 to 5485 is still not convincing. The market is not out of the woods though a short term bottom could be in place if 5380 holds.  However from a sell on rally the market has turned to buy on dips and bottom fishing.

Nifty 22nd May to 27th May

Although the market saw a comeback rally on Friday last but nifty is still in the grips of the bears. This being the week of expiry of the May series, upside spurts cannot be ruled out. Still it is a sell on rally market and best suited for bargain hunting for medium turn.

Conspiracy theory, this!

The head of the International Monetary Fund, Dominique Strauss-Kahn, was arrested in New York on Saturday (early morning Sunday in India) for allegedly sodomising a Manhattan hotel maid. The trouble began when a housekeeper entered his room at the Sofitel on west 44th street. It is alleged that he emerged from the bathroom naked and grabbed her. The timing of the arrest is sensitive especially when the I.M.F.'s busy saving Greece from default. Some believe that this is a set up.

Nifty 16 May 2011 to 20 May 2011.

The 5544.75 mark where it closed last week is a critical point and therefore totally inconclusive although the markets staged a smart comeback on Friday the 13th just like it did on Friday the 6th. However unless  the  Nifty stays conclusively above the 5675 mark on Monday with good volumes, it still is a sell on rally. Fresh buying will emerge only above the 5775 mark. The 5340 mark must act as a support.

Nifty 9th May to 13th May

Although the market staged a smart recovery on Friday but it is still in the grip of bears. Unless the Nifty manages to stay above  the 5680 levels with good volumes in the opening three four hours of trade and closes above 5700 mark, it is a sell on rally market. However above the 5755 levels fresh buying may emerge.

Remain invested in low duration funds!!

 RBI governor's tone was rather hawkish; the priority being to rein in headline inflation  at the cost of lower growth going forward, as opposed to the earlier stance of supporting growth while containing inflationary pressures. The bond prices will probably remain range-bound with a declining bias in the near-term as market participants may await a revision in the fuel prices and its impact on headline inflation. The yield curve will flatten more in the near-term as the 50 basis-point hike will gradually push short-term rates higher. 3M bank CD yields will gradually trend towards 9.50-9.75% pa from their current levels of 9% pa. 12M bank CD yields may touch 10% pa in the near-term. Banks will probably raise both deposit rates as well as lending rates in a gradual manner. It is advised to remain invested in low duration funds at the moment and wait for money market rates to peak out in the next three to six months before seeking to extend the duration of investments.

RBI announcements in its Annual Monetary Policy Review.

The RBI has made the following announcements in its Annual Monetary Policy Review yesterday:
-Repo Rate is increased by 50 basis points to 7.25% with immediate effect.
-Reverse Repo Rate is increased by 50 basis points to 6.25% with immediate effect.
-In line with the Deepak Mohanty Committee’s recommendations, the RBI has introduced a new Marginal Standing Facility (MSF) for banks to borrow up to 1% of their NDTL at 100 basis points over the new Repo Rate. The banks who do not have -surplus SLR can now borrow over-night money from the RBI at 8.25% pa..
-Savings Rate has been hiked from 3.5% pa to 4% pa.
-Both CRR and Bank Rate has been left unchanged at 6%.