Finally, the NSE Nifty added 0.2% but the BSE Sensex closed virtually unchanged on the last week. The Indian markets once again failed to capitalize the bright start as the Fed's downbeat assessment of the US economy coupled with worries about the state of other key economies weighed on the sentiment. However, stellar results by banking major SBI, Tata Motors and the steel giant Tata Steel helped counter the bad news on the domestic economy (IIP fell and food inflation spiked).
Nifty Future is moking continuous effort to break either side of the trading range of 5380–5480, but is meeting with renewed selling pressure at 5480 mark and lower levels with heavy buying at 5380 mark. Nifty Futures is stuck in this narrow range of 100 points from almost a month and only a break on either side with good momentum and heavy volumes on closing basis will see fresh 200 point move. Levels to watch for are 5550 & 5600 on the upside and 5350 & 5250 on the downside. The action in the market has turned to stock specific with good returns.
Globally, the Dow was down almost 3.5 % during the week whereas, our markets gained only 0.2 pc or 13 points on the Nifty. The Sensex rose by 24 points but 84 points were contributed by SBI. The Federal Reserve's move to resume quantitative easing in light of a string of disappointing data points recently stoked fears of a possible double dip. China continues to slow though it is unlikely to confront a hard landing. The euro-zone is showing signs of a comeback, thanks largely to Germany's scorching pace. The UK has been hit due to deep spending cuts. Also, reports suggested fresh trouble in PIIGS, with the ECB apparently having to step in to check volatility in Irish bond market. Japan of course is facing its own set of issues. Domestically, a deteriorating external picture could just prompt the RBI to go slow on its tightening spree, though only time will tell if that indeed turns out to be true.
On the flipside, FIIs continue to repose faith in the India story and are not expected to flee overnight. FIIs have pumped in over 4000 crores in August and 16000 crores this year.The nifty has rallied only 2% in spite of almost a billion dollars being pumped. Some moderation in inflation could come in handy.
The latest monthly inflation will be out on Monday. Amidst all the talk of a global slackness, India may still manage respectable 8-8.5% growth and earnings growth will also be decent if not spectacular.
However, we have to keep in mind that the critical resistances around 5500 have still not been cleared. HOPE FOR THE BEST!!!!!!!
NOTE: Thanks to Mr. Nishit Vadhavkar; Some of data were taken from his blog.
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