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Market Strategy : 14-May-2012

The start today is likely to be subdued as investors await the release of April inflation numbers.

There is gloom all around and market players have turned wary of near-term prospects for risky assets such as equities. The IIP for March was dismal to say the least, once again calling into question the reliability of the data. Hopefully the Centre will soon address the issue of wild gyrations in important economic statistics.

The start today is likely to be subdued as investors await the release of April inflation numbers today, The annual rate of inflation based on the Wholesale Price Index (WPI) is seen easing to 6.6% in April 2012, as per the median estimate of a poll of economists carried out by Capital Market. . Headline WPI is likely to have cooled a wee bit, but the RBI is unlikely to get swayed by it due to high fiscal deficit and suppressed inflation in fuel and fertilizer.

The rupee remains under threat on deteriorating external balance despite the RBI's attempts to cap its losses. The risk-off trade is expected to continue globally given the renewed fears over eurozone debt crisis and its impact on world economy.

The Government continues to dither on key reforms citing coalition compulsions while GAAR provisions, Vodafone row and telecom mess are keeping FIIs at bay. Earnings will continue to garner some attention as India Inc. braces for another tumultuous financial year.

Asian stock indices are mixed today despite RRR cut by China on Saturday. US markets fell on Friday notwithstanding a positive report on consumer sentiment. JP Morgan's big trading loss weighed on the sentiment on Wall Street.

European equity benchmarks recovered from intraday losses on Friday but are likely to remain under pressure amid mounting political uncertainty in Greece.

Key Results Today: Abbott India, Adani Ports, Adani Power, Alstom T&D, Ashok Leyland, Eicher Motors, Havells India, Indraprastha Gas, IVRCL, JSW Steel, L&T, Maharashtra Seamless, Manappuram Finance, Monnet Ispat, Morepen Labs, J Kumar Infra, JK Paper, Everonn Education, Hindustan Dorr-Oliver, Orchid Chemicals, Saregama India, Shyam Telecom, Simplex Realty, SREI Infra, Trigyn Tech and Viceroy Hotels.

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