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India week ahead - 26th June - 1st July 2011

|Includes: EEM, WisdomTree India Earnings ETF (EPI), IFN
This week Indian markets moved up 2.1 %, the equity markets fell sharply on Monday to touch 5190 and then moved up sharply on Friday. The volatility this week was driven by the Mauritius tax pact and the Greece debt issue. These may not go off in a hurry. The Oil crashed by 8 % helping cool off the inflation worries across the world, the US winding down the easy cash regime by June end has decided to release some of the oil strategic reserves to cool off prices. The IMD has revised the rain fall forecast to 95 % from 98 %, this may affect the food supplies and drive inflation. The government decided to increase the prices of diesel, kerosene & LPG; this will put further pressure on inflation.
This week the Indian markets may move in a sideways mode, after a sharp pull back on Friday, we may see some consolidation. The markets will look up to the coming derivative settlement and the approaching results seasons.
The derivatives position for the week stands at Rs 145061 Crs in OI; the PCR is at 1.28 the option IVs for Calls at 18 % & Puts at 17 %. The Nifty Future is trading at a premium of 14 points to spot.
Nifty on 23rd June: 5471
Nifty trading ideas for the week: None – Markets expected to be Volatile with sideways movement
Stock ideas for the Week: Buy Tata Motors @ Rs 940 Target: Rs 1000 SL: Rs 920