Humans are supposedly vegetating in front of the television when they watch it for hours. What happens when you show television to vegetables?
A leading US atmospheric physicist busts some myths on global warming.
The short-term rally is coming to an end. The medium-term uptrend is intact. Wait to buy at around 16,600
Last week, I had suggested that we expect the market to remain strong. Our suggested target for the Sensex was around 17,300-17,400. As it turned out, the Sensex hit a high of about 17,245 in the morning of Friday and struggled for the rest of the day to even stay above 17,200, the current lakshman rekha for the index. It ended the day at 17,127. It has been an intense struggle for the market to stay up and next week it will possibly give up some of the gains.
We are saying this despite the fact that the risky assets had a great week, helped by data confirming gradual US recovery. Investors’ fears were also calmed when Greece took austerity measures and its default risk blew over. Equity and commodity markets globally were firmer, with oil hitting the $83 per barrel mark in intraday trading and copper futures reaching $7,500 per tonne.
Separately, US surveys and payroll reports boosted hopes for an improving jobs market. The UK services survey was also strong. On Monday the US ISM manufacturing index for February fell to 56.5 from a five-year high of 58.4 reached in January. Service sector reports later in the week were also positive for the US and the UK. One of the more positive pieces of data was US payroll which on Friday showed only a small 36,000 decline in jobs in February—a vast improvement from a 726,000 drop in February 2009. Improvement in hiring intentions also suggests employment growth will soon turn positive. However, as the recovery gathers steam, there would be worries of rising interest rates. In fact, last week, The Reserve Bank of Australia raised interest rates again by 25bp to 4%, to bring rates closer to ‘average levels’ amid continued recovery in the economy.
Last week, money flowed into emerging markets from global investors. Within that, Russian funds' net inflows reached 20-week highs while Chinese equity funds had net inflows of $31 million, only the second week when more money went in than out this year. India has also gained a lot from renewed interest of foreigners. The strong post-Budget rally has seen a net inflow from foreign institutional investors. FIIs have put in a hefty $2.02 billion in domestic stocks by 9th March.
On the domestic news front, industrial production grew by a robust 16.7% in January compared to just 1% in the same month a year ago, led by manufacturing, which has around 80% weight in IIP. Within manufacturing, capital goods surged by 56.2% in January against 15.9% in the same month last year. For December 2009, industrial production was higher at 17.6%, up from the provisional estimate of 16.8%.
However, don’t be carried away by a plethora of positive news. While the media is broadcasting these facts, the market is headed nowhere. It is time for the market to come down a bit. It will consolidate the rise and then push higher in late March-early April.
User