The World This Week - October 31 - November 4' 2011

The World This WeekOctober 31 – November 4, 2011

Equity View:Last week, the equity markets were very uncertain and volatile. The Nifty corrected by around 1.5% owing to concerns inthe Eurozone. The immediate option of a referendum on Greek acceptance of the package was dropped after GermanChancellor Angela Merkel and French President Nicolas Sarkozy bluntly asserted that a failure by Greece to cooperate inthe bailout would be tantamount to leaving the 17-nation euro zone.On the results front, the Q2 results for capital goods companies were disappointing. Banking & Automobile space posteda decent set of numbers.Leaders attending the G20 summit last week departed without funding Europes much wanted bailout fund — theEuropean Financial Stability Facility (EFSF) — or committing fresh cash to the International Monetary Fund (IMF) whichcould then lend to it. ndIn US, we had a good set of GDP growth number for 2 quarter followed by unemployment numbers which were in linewith the consensus expectations. Unemployment rate in US for month of October came at 9% after being stuck at 9.1%for last three weeks but it still remains one of the main causes for concern in US.News:DOMESTIC MACRO:  Indias food price index rose to 12.21% from last week’s 11.43% and the fuel price index declined to 14.5% from 14.7% in the year to Oct. 22.  Indias foreign exchange reserves rose to $320.390 billion as on Oct. 28, from $318.358 billion in the previous week.  India and Russia will sign a pact in December to speed up registration of domestically made drugs in the Russian market.GLOBAL MACROEuro:  The euro zone won verbal support but no new money at a G20 summit on Friday for its tortured efforts to overcome a sovereign debt crisis, while Italy was effectively placed under IMF supervision.  Intense European pressure forced debt-stricken Greece to seek political consensus on a new bailout plan instead of holding a referendum after EU leaders raised the prospect of a Greek exit from the euro to preserve the single currency.China:  The headline business activity index in the HSBC China Services PMI climbed to a four-month high of 54.1 in October, well above Septembers 53.0, as new order growth accelerated for a second successive month and the new business component of the PMI also scaled a four-month peak.US:  The jobless rate edged down to 9% in month of October after being stuck at 9.1 percent for three consecutive months.  The U.S. Federal Reserve on Wednesday said economic growth had strengthened somewhat and made no changes to its ultra-easy money policies.

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The World This Week - October 31 - November 4' 2011

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