Equity Pulse : Sharp downfall during previous week on weak global cues

Dear Kundapur Govardhana Kini, We understand the need for the right research to make smart  investment decisions. To keep you well informed, we present the market outlook for this week.   Previous Week : A sharp downfall during the previous week on weak global cues   The market finally saw a sharp downfall during the previous week       on weak global cues and there were no significant positive surprises during the ongoing earning season. The week started on a positive note. However, after that, sellers took hold of it. The last couple of days witnessed sharp movements Both indices, however, managed to close modestly above their      lows for the week On a week-on-week basis, the BSE Sensex shed 695 points or   ~4%, to close at 16859.68. The S&P CNX Nifty, on the other hand, fell by 216 points or ~4.1% to close at 5036.00 for the week Indication of monetary tightening by the Chinese central bank, worries over US banking policy and some disappointments from companies like L&T on the earning front remained the major reasons for the markets to see such a fall. Comments by a government official that GDP growth for the October-December quarter may come down to 6-6.5% also dampened the market sentiment   Week Ahead : Market is expected to be weak in the coming week as well   Just when participants were expecting the markets to go further down, they bounced back sharply proving most of them wrong. This  shows the strength of the recent rally and also indicates that the downfall during the previous week was probably only a minor correction of that upward rally.     Since mid December till the last week, the market had seen a      smart run up making new highs. For the past few days, however, the market remained highly range bound and some triggers were required for the market to break that range bound movement A downward correction was also expected, as both indices were hovering around their recent highs for a few days. The triggers came in the form of concerns over the global economic recovery process, as China indicated a tightening of its monetary policy and worries over US banks also resurfaced with proposal by the government on  restricting banks from allowing to own, sponsor or invest in hedge funds or proprietary profits In India, too, the market got indications from comments by the chief     statistician that the GDP growth would be within the range of 7% for FY2010 and that it is likely to keep the over expectation from domestic growth story under check at least to some extent So far, the earning season also did not show any significant  positive surprise. Looking at the overall scenario along with the fact that both indices broke some crucial support levels the market is expected to be weak in the coming week also. Some short covering, however, cannot be ruled out at lower levels  Pick of the week Company Name RCP* Target Price Potential Upside Time Frame Texmaco 154.8 170.2 Target Achieved 3 months Sincerely, ICICIdirect.com Did you know : You can set SMS Alerts to receive stock quotes  of your favourite stocks