Global Market Cues Jan 03 2011

Domestic Cues

1.Food inflation at 10-week high of 14.44% , Food inflation stood at 12.13 per cent inthe previous week. This is the fifth consecutive week when the rate of price rise of food items has increased.

2. The growth of six infrastructure industries slowed to 2.3 per cent in November, the lowest in the current fiscal, mainly due to contraction in production of cement and petroleum refinery products. The six core sectors - crude oil, petroleum refineryproducts, coal, electricity, cement and finished steel - had expanded by 5.9 per cent in November 2009.

3.The growth figure for October has been revised upwards to 8.6 per cent from the earlier 7 per cent

4.Inflation for November was at 7.48 per cent, down from 8.58 per cent in the previous month.

5.High food inflation could prompt the Reserve Bank to hike key short-term rates at its policy review next month.

GLOBAL Cues

US Market:

The economy is getting stronger. Auto sales have improved and are expected to grow another 11% or so in 2011. Manufacturing has also improved. The banks, while not entirely healthy, aren't tottering.

the economy and the markets face big challenges which include high unemployment,home foreclosures, continued debt problems in Europe, the threat posed by rising oil prices and continued trade tensions, particularly with China.

Stocks were flat for most of the final session of the year, but ran into a flurry of selling in the final minutes

The outlook for the upcoming year, according to a Bloomberg survey of the strategists from 11 of the largest brokerage firms in the United States, the mean consensus target for the S&P 500 by year end 2011 is roughly 10% above current levels. Further, every single strategist is expecting a positive performance out of the index in 2011. The three key risks expectations heading into 2011 are: global growth slowing, inflation accelerating, and interconnected risk heightening.


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