Good economic outlook

The Nifty is finding support at every fall. The rebounded of stocks are more than the faring negative ones. This is a classical sign of bottoming of markets. It is evident that the Indian economy is not doing well when it compared to yester years but the fact is that when the world economy is in crisis we are talking about a growth rate around 7%. The India’s economy growth is contracted and stood at less than 7 % in July-Sep-11 but the other favourable indicators are started flooding in. The negative growth in inflation is a very positive sign and the RBI’s preparation for a rate cut any time soon will help the industries to cut the debt burden and the serviceability will be improved. The current challenge is due to FCCB conversion or payment and the higher load on companies’ equity due to rupee depreciation is a cause of concern.

The Central Govt lead by UPA is preparing to face the elections in Hindi heart land. Any favourable signs of improvement in their tally will boost the confidence to reforms. The RBI is willing to go for a rate cut in March-12. The study reports are giving encouraging results as the Indian economy is going to be 2.5 trillion by 2021. The Govt. is planning to spend and expecting at least one trillion on infra structure by 2017. In similar lines, the reports suggesting that the per capita income likely to grow by 900USD to 1800 USD by 2012. Reliance is not showing required strength to float above 729 is a cause of concern.

The banking and housing finance stocks did not fall as they are expected, is a good sign to bulls. The metal stocks like Tatasteel and SAIl alomost bottomed out. The TataMotors is out performing the market. The stock may not fall below 186-185 level even Nifty slide. The has stock has a potential to go above 225 and may touch 240-250 level in coming months. The other stock is M&M which is lagging the over all market. It has strong resistance at 693 level, once crossed likely to touch 740-750 level easily. The next fall that takes place in Nifty, M&M very likely to cut it's  yearly low but may not fall far below it"s yearly low. The SBI is taking two steps back ward and one step forward. The ICICI Bank managed to build its bottom at 685 level is a good support, fair chances are it may touch 620 level.