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Weekly Stock market reviews after 11th November, 2011.


France has been downgraded from AAA ratings!  No, that was not true. That was a mistake, but Moody’s lowered its outlook for the South African nation’s sovereign debt was true. In past I told many times that I am expecting changes in outlook or downgrades for European countries like France and UK. But now I am expecting this type of things for many Emerging countries. May be not in coming days but in future we may see more lowering outlook and downgrade for Emerging, especially Asian countries.
Surge in Italian Bond Yield helped to plunge the markets but later with the news of change in leadership and better economic news, markets recovered some ground. During last two weeks some of the stock indexes were corrected more, especially indexes like Nikkei.

INDEX
11-Nov,2011
11/4/2011-11/11/2011 (%)
10/28/2011-11/4/2011 (%)




DOW
12153
1.41
-2.02
FTSE
5545.38
0.32
-3.06
CAC
3149.38
0.82
-6.7
DAX
6057.03
1.39
-5.86
NIKKEI
8514.47
-3.26
-2.74
HANG SENG
19137.17
-3.55
-0.88
AUS
4296.5
0.35
-1.65
SHANGHAI
2481.08
-1.86
2.23
SENSEX
17192.82
-2.1
-1.35
BOVESPA
58546.97
-0.2
-1.41
RUSSIA
6108.85
-1.38
-0.47
INDONESIA
3778.88
-0.12
-1.18
KOSPI
1863.45
-3.36
-0.03
STRAITS
2790.94
-2.01
-1.95
THAI
970.97
1.42
-1.63
ARGENTINA
2751.67
-0.35
-8.41

Report were mostly bad this week as Spain’s economy posted a zero growth, Australian trade surplus reduced for the month of September, drop in German industrial production and EU cut it’s growth forecast for 2012. Where better reports came from Chinese and UK inflation figures, rise in manufacturing output of UK.



Stock market (Index) forecast for Coming week

If all the things go according to plan then we can expect a up move in the market but if things go contrary, (for example if new governments don’t want to continue the austerity measures) then market will plunge from this level. Markets are now completely news driven, resignation of Berlusconi may create a good environment for early days. If I am not wrong then mid November is the testing time for Greece, so focus may again shift towards Greece.
Last week I was talking about the range of 11950-12000, as such DOW was more or less in that range. In the upside I was taking about 12400–12500 and I think in coming week it may test that level but before that it has to cover 12200 level. If it drops later then it will get support at 11600 level.
DAX is still following that 5800-6400 range, this week it was more or less flat. I think DAX will face hard times to get out of this range. As it looks like that it is even facing hard time to test 6200 level, but if it gets good news from Italy and Greece in coming days then it will try to test level above 6200. Now if it drops below 5800 then it may test up to 5200 level.
Last week I was expecting that Shanghai Composite may test 2450 level, Now 2500 is very important level for it. 2450 will act as a good support for it and in the upside 2600 level is the resistance for it.
BOVESPA was flat, 56000-57000 level is still a good support for it. If it breaks that then it can test 53000 level. On the upside 64000 is the target for it.
Probably this is the first time I am writing about STRAITS TIME, now it is getting solid resistance at 2900 level. It has a solid support at 2700 level. I think it will move around that range and if I am not wrong it is making a bullish pattern, so there is a chance that it may go more in the upside than downside.


Reports due in coming days

Tuesday, 15th November, 2011 – Producer Price Index, Retail Sales, NY State Mfg. Index.
Wednesday, 16th November, 2011 – Consumer Price Index, Industrial Production, Housing market Index.
Thursday, 17th November, 2011 – Unemployment Claim, New Home Starts, Fed’s Phila Business Index.

Friday, 18th November, 2011 – Leading Economics Indicators

From every news headlines from Euro-are I read one common thing that is spending cut. Look like everyone is trying to cut their spending, whether it is government, consumer or business organizations. The thing I don’t understand that if everyone is trying to reduce their spending then how the growth figure will improve?  Many banks are already suffering losses and in future they may have to suffer more, on the other hand banks are cutting back their lending because they are finding it hard to borrow. Same story is also true for governments. Countries are cutting their growth forecast, now all these are clear indication of recession. Here one thing I don’t understand that, how they are going to pay their debts.
Head of IMF warned that global economy is at the risk of being plunge into a “lost decade”. On the other hand some are asking more efforts from Asia pacific countries to restore global growth. But will anyone help to clean the garbage of others!



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