Market Walk

After being under pressure for past two weeks, the Indian equity market registered
smart gains amid easing consumer price inflation (CPI) and declining wholesale
price inflation (WPI).

Healthy global cues and declining inflation back home could be attributed to
recent rally earlier this week. WPI inflation gave a positive surprise as it fell
to its lowest levels since July 2013.

So far earnings season has been a mixed bag with both Infy and HCL Tech surprising
on the positive side. HCL Techs Q2F6/14 operational performance was a
comprehensive beat both in quantitative and qualitative terms.

Axis Bank and TCS however failed to enthuse the street. At the end of the week RIL
declared its Q3 results which were also much better than market expectations with
its PAT totaling Rs 5500 crs against street expectations of Rs 5200 crs. However a
large part of this profit rise was mainly on account of a large other income in
the Q3.

On the Global front the World Bank raised its forecast for global growth for the
first time in three years as advanced economies started to pick up their pace, led
by the U.S. It has predicted global GDP will expand by 3.2% in 2014 from 2.4% in
2013, stabilizing at 3.4% and 3.5% in 2015 and 2016, respectively.

Also the U.S. Industrial Production rose for a fifth month in December 2013.
Production increased by 0.3% in December, after a revised 1% increase in November
2013.

While the RBI move later this month will be a topic of speculation, corporate
results will continue to hog the limelight.

The coming week has a number of larger companies announcing their results. These
include Colgate, L&T, M&M, Biocon and Cairn India. Expectations are that RBI
governor will maintain status quo again at the next monetary policy announcement
scheduled for January 28 because of moderation in recent inflation figures

Besides the RBI policy, news flow leading to the US Federal Open Market Committee
two-day meeting (January 28 and 29) will also be keenly watched by equity market
investors in the coming weeks

However in the coming week, markets will take cues from the next batch of earnings
from blue-chips, including HDFC and L&T, amid cautious trading ahead of the RBI
policy later this month.

Technically the markets look to have made a strong base around 6200 levels but
6350 is a very important resistance level and unless this level is not crossed we
could see a range bound movement In the week ahead.