Daily Mkt Strategy

Deceiving others. That is what the world calls a romance – Oscar Wilde.
The bulls are set to flirt in the market. How long the romance lasts no one knows but no harm in staying happy for the day. Bear in mind, don’t commit too much at first sight in markets or otherwise.
Today we might see even the side counters joining the Valentine's Day party. But don’t get trapped by any rally and start buying aggressively again. The near-term outlook remains murky despite the slight improvement in the sentiment. Any upside should be used as an opportunity to exit weak counters. Medium-to long-term purchases could be in quality stocks only.The Dow Jones Industrial Average is up 2.5% in two days. Other global markets have also done well or at least hasn't fallen much. Our market also rallied yesterday in line with the global upswing. However, the breadth was still negative and the small-caps and mid-caps continued to struggle. In short, the advance wasn't convincing as investors remain apprehensive about a sustained rise from these levels. We may see the same trend continuing over the next few days before there is any stability. This may happen just ahead of the Union Budget.
On the F&O side, Nifty (February) futures discount decreased to 20 points from 43 points and around 16.37 lakh shares were shed in open interest. Total open interest in the market was Rs65,946 crore. The FIIs turned net buyers of Rs1084 crore in Index Futures and by Rs603 crore in Single Stock Futures.
FIIs were net buyers of Rs94mn (provisional) in the cash segment on Wednesday. Local institutions were net buyers of Rs235.9mn. In the F&O segment, FIIs were net buyers of Rs17.02bn yesterday. On Tuesday, foreign funds pulled out Rs1.15bn from the cash segment. Mutual funds were also net sellers of Rs984mn on the same day.
Asian markets have surged this morning, spurred by the overnight rally on Wall Street. The Nikkei in Tokyo was up 364 points at 13,433 while the Hang Seng in Hong Kong advanced 809 points to 23,979. The Kospi in Seoul gained 44 points to 1676 while the Straits Times in Singapore rose 88 points to 3038. The Shanghai Composite in China was up 48 points to 4538 and the Taiex in Taiwan jumped 208 points to 7758.
The Bank of Japan is expected to keep interest rates unchanged at the conclusion of the two-day meeting on Friday. The central bank's nine-member policy board is widely expected to hold the benchmark short-term interest rate unchanged at 0.5%. That rate is the lowest in the developed world.
But speculation is growing that the Japanese central bank may ease its previous stated policy of gradually raising rates as it focuses on the risks of a global economic slowdown and tallies the recent shakeout in Japanese financial markets.
US stocks rallied on Wednesday after a surprisingly strong January retail sales report helped soften worries that a weakening consumer demand could send the already struggling economy into a recession.
The S&P 500 Index added 18.35 points, or 1.4%, to 1,367.21, its biggest gain in two weeks. The Dow Jones Industrial Average climbed 178.83 points, or 1.5%, to 12,552.24. The Nasdaq increased 53.89 points, or 2.3%, to 2,373.93.
Market breadth was positive. Four stocks rose for every one that fell on the New York Stock Exchange.
Some Wall Street watchers say the US market may have bottomed out on January 23, when the Dow hit a trading low of 11,644. Since then, stocks have rallied, and as of Wednesday afternoon, the Dow was more than 7% off the Jan. low.
Applied Materials climbed the most in five years and helped push the Nasdaq to its best gain since November. Exxon Mobil and ConocoPhillips led oil shares higher after the Commerce Department said rising prices at filling stations spurred an unexpected increase in retail sales last month.
Retail sales rose 0.3% versus forecasts for a drop of 0.3%. Sales, excluding autos rose 0.3%, versus forecasts for a rise of 0.2%. A separate report showed that December business inventories rose 0.6%, topping forecasts.
On the corporate front, investors were enthused by the better-than-expected earnings from chipmaker Applied Materials and Dow component Coca-Cola.
Additionally, reports suggested that News Corp. is in talks with Yahoo! about combining MySpace and other online properties. A potential deal would give News Corp. a stake in Yahoo! and perhaps help the company fend off Microsoft's $44.6bn unsolicited takeover offer.
A latest Merrill Lynch global survey shows that fund managers are more worried about a US recession than in the previous month. They are also keeping more cash than in previous months and are the most worried about stocks since the aftermath of the 9/11 terrorist attacks.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.72% from 3.66% late on Tuesday. In currency trading, the dollar gained versus the yen and was little changed versus the euro.
US light crude oil for March delivery rose 49 cents to $93.27 a barrel on the New York Mercantile Exchange, gyrating after a weaker-than-expected weekly oil inventories report. COMEX gold for April delivery fell 90 cents to $910.20 an ounce.
Stocks in Europe closed with modest gains. Markets see-sawed late in the session, but the pan-European Dow Jones Stoxx 600 index ended the day 0.1% higher at 323.30. The German DAX 30 rose 0.1% to 6,973.67, while the French CAC-40 gained 0.3% to 4,855.40. The UK's FTSE 100 index lost ground, ending the day 0.5% lower at 5,880.10, after losses in the banking sector.
In the emerging markets, the Bovespa in Brazil rose 1.3% to 62,590 while the IPC index in Mexico . The RTS index in Russia was up 1.2% at 2004 while the ISE National-30 index in Turkey jumped 3% to 56,087.