Digestion of recent gains order of the day for mkt: Udayan

Today has looked more like a pause than a run away like last week and we have just been circling around that 5,100 mark. Even Europe, after starting with a major gap-up has sort of given up some of its gains. I guess a little bit of digestion of recent gains is the order of the day for both local and global markets.

I think Spain is priced in now with the reaction that we have seen in the last few days. That was one imminent crisis for the market and now that they have asked for a bailout, it is ironic to see markets cheering a bailout being asked from a major European nation. But, that tells you what the psyche of the market right now is.

It just wants to avert a financial market disaster or panic and to the extent that it has been staved off for now, we have seen some kind of a rally in markets. But, I think Spain is in the price now. We move on to Greece at the end of this week. The euro has already moved up, back to 1.26.

But is it good for more, will the dollar slip more from here? I think you keep watching the currency markets closely from here because I guess the euro will give you a sense of what kind of European mood or risk-on we can see continuing from hereon. Part of the easy money has been made in the global pullback. For much more in the near-term, you will need to see a good outcome from Greece. And if the markets goes its way, we will celebrate next week.