"THE WEEK PAST AND THE WEEK AHEAD"

This week saw the indices falling below their 200-DMA initially. A freak trade in Reliance and a crash in the overall market on Tuesday had the bulls bruised. Fortunately the remaining days saw some pull back though with the usual intra-day gyrations. Monsoon arrived in Kerala, but uncertainty persists over its progress, which are adding to the market’s woes. India grew faster than expected in fiscal year 2010, March quarter GDP growth came in at 8.6%. Impressive monthly auto sales numbers boosted the auto stocks. FMCG stocks attracted buying interest following positive news flow across the sector. Volatility in the markets drove investor’s attention towards defensive pharma space. Finally, the NSE Nifty was up by 1.4% and BSE Sensex was up by 1.5%.

China's manufacturing sector growth slowed in May.

The coming week we may see some added pressure especially at starting. The US markets could well be on their way down again as the Government's monthly jobs report that has fallen short of expectations. Indices are struggling to break out convincingly from their resistance zones. There appears no clarity for now on the direction of the market though the fear factor seems to dominate. Weigh your options and take a call on individual stocks rather than betting on the market as a whole.

The Indian markets have clawed back above the 200DMA average and have seen broad participation from most sectors except metals. Next week we will see the all important EGoM meet on fuel price decontrol and the roadmap going forward. The progress of monsoons will be watched very closely as currently for the week-ended 2nd June, the rains have been deficient to the tune of 11%. The pick-up in the rains would be vital as the market is factoring normal monsoons and any disappointment are likely to be met by selling. The markets are expected to trade with a stable to positive bias on weekly basis.