"THE PAST WEEK : A REVIEW AND A GUIDANCE"

The failure of the key indices to head higher after making a new intermediate highs this week confirms that the market is a little jittery. Disappointing IIP report and stubbornly high inflation have only added fuel to the confusion. In addition, Global cues too are not rosy amid persistent worries over the state of affairs in the US, EU and China.

The only positive development is the improvement in the euro versus the dollar. So, the near-term trend may continue to be driven partly by earnings of Indian Inc.  and partly by external factors (global markets's movements).

Inflation is a big worry and the same may remain so for some more time to come. But, a calibrated monetary tightening has already been discounted and won't be much of a problem. Given this backdrop, one could continue to be positive on India over the medium to long-term though some caution is warranted in the near term owing to a fragile global situation.

The key indices may find it tough to accelerate beyond a point if world markets are not supportive. A lot will hinge on how the rest of the results from India Inc. unfold. A big positive for India is the fact that FIIs seem to be fairly upbeat about growth prospects here. So, any fall will only make our market that much more attractive at a time when the world is struggling to keep the momentum going.

MAJOR NEWS:

Rupee joins elite club...gets its own symbol

Industrial output unexpectedly falls in May.

Inflation rises to 10.55% in June.

January-June passenger air traffic up 22% yoy.

Tata Motors hikes Nano prices by 3-4%.

RESULTS:

Tata Consultancy Services: Picture perfect; Kotak Institutional Equities maintain BUY ratings, Target-965

Axis Bank: Focused on growth; maintains ADD rating; Target-1500
Colgate-Palmolive (India): Good quarter; valuations leave little upside; EXIT
Castrol India: Better-than-expected results but valuations hard to justify;  EXIT
LIC Housing Finance: Business remains in sweet spot; retain positive outlook; ADD for Target-1250
Polaris Software Lab: Margin pressures surface; SELL for Target-180
UPDATES:
Reliance Industries: Cash deployment continues to be an issue; Sell for Target 985
Technology Sector: Volume momentum strong but watch out for wage pressure
Energy Sector: Buying opportunity

STOCKS TO WATCH: IDFC, KOTAKBANK, GLENMARK, MCLEOD RUSSEL, REC, RCF.