Infosys disappoints and weak global cues

The markets lost 2.2 % to close the week at 5207. The European cues and Infy results dragged the markets down.

1.Infosys results cannot be taken as the benchmark for IT as a whole.Its best to wait and watch the results of TCS and Cognizant. Infy is set to move to third spot with Cognizant taking over. No pay hikes this time at Infy may lead to increase in attrition. The best days of Infosys may be behind it.

2. The RBI credit policy on Tues has a Repo cut of 25 basis points factored in. With inflation still pretty high, its difficult for anything more. At best a CRR cut of 25 basis points and a Repo cut of 25 basis points.

3. Wave C began at 5136 with a target of at least 5650. We have retraced almost 80 pc of this. Sustaining below 5180 would open further downsides.

4. FIIs have been sellers in the month of April. They have sold to the tune of 284 crores. Till they start buying, the markets will not go anywhere.

5. The movement is likely to be stock specific. The resistance area around 5350-5400 needs to be cleared for further upsides. The good part is that the stocks are not tanking much.

6. The European markets tanked because of Spain bond auctions. The yields rose making it more expensive for Spain to borrow. This may be a trailer of future crisis in Europe.Spain is much larger than Greece and if it faces a debt crisis expect the world markets to tank and Gold to rise.

7. The markets are looking for an upside trigger which may come in the form of RBI policy. Let us wait and watch.

For those interested in stock specific views,
http://vipreetinvestments.blogspot.in/2012/04/follow-broader-picture.html