Nifty has to stay above 5,045 for the upmove to continue

The market closed in the positive for the second week in a row on hopes that the Reserve Bank of India (RBI) will cut key rates in its mid-quarter policy review on 18th June. Besides, there are speculations that central banks across the world would draw up new initiatives to control any financial chaos in the aftermath of Greek elections to be held on 18th June.
 
Overall, the market gained 1% with the Sensex closing the week at 16,950, up 231 points, and the Nifty gained 71 points to settle at 5,139. On Friday the Nifty recorded an intraday high of 5,146 which was its best since 4 May 2012. If the benchmark stays above 5,045, it could go up to the level of 5,280 else we may see it going down to the level of 4,900.
 
The market started the week in the negative on remarks by ratings agency S&P that India would be the first among BRIC nations to lose its investment grade rating. The market closed in the positive for the next two days on optimism of a rate cut by the RBI. The indices settled lower on Thursday as high inflation numbers pulled down rate-sensitive sectors. Positive sentiments, once again, pushed the benchmarks higher on the last trading day of the week.
 
The BSE Fast Moving Consumer Goods and BSE IT gained 3% each while the BSE Realty index fell by 2% and the BSE Healthcare index slipped by 1%.
 
Among Sensex stocks, Hindustan Unilever (up 5%), Infosys, Coal India, ITC and TCS (up 4% each) were the top gainers. On the other hand, NTPC (down 4%), Dr Reddy's Laboratories (down 3%), Maruti Suzuki, Wipro and HDFC (down 1% each) settled at the bottom of the index.
 
The top gainers on the Nifty this week were Ambuja Cements (up 12%), Grasim Industries (up 8%), ACC (up 7%), BPCL (up 6%) and HUL (down 5%). The major losers were NTPC (down 4%), Bank of Baroda, Dr Reddy's, SAIL (down 3% each) and Ranbaxy (down 2%).
 
India's industrial growth, as measured by the Index of Industrial Production (IIP) slowed down sharply to 0.1% in April due to contraction in capital goods and dip in manufacturing output. Growth in factory output was 5.3% in April last year.
 
Headline inflation moved up to 7.55% in May on account of a rise in prices of potato, pulses and wheat. Inflation, as measured by the Wholesale Price Index (WPI), was 7.23% in April. In May last year, however, it was 9.56%. Food inflation, which has a 14.3% share in the WPI basket, rose to 10.7% in May, from 10.5% in the previous month.
 
India's exports declined by 4.16% to $25.68 billion in May due to unabated slump in global demand and a slowdown in domestic industrial growth. Imports dropped by a sharper pace of 7.36% to $41.9 billion, signalling weakening of the economy. The trade deficit also narrowed to $16.3 billion during May, from $18.5 billion a year ago.
 
On the global front, all ayes will be on the outcome of the Greek elections and hopes that US Federal Reserve will announce new measures to boost the country's economy. Leaders from the Group of Twenty (G20) nations, who are scheduled to meet next week in Mexico, said central banks were ready to provide liquidity and avert any credit squeeze if the market is under pressure after Sunday's election in Greece.