A close below 5,290 followed by a break of 5,265 during the week will be bearish
The Indian stock market closed with modest gains, mainly supported by domestic triggers and global cues. While factory output and the services sector showed a positive outcome in June, India's exports for May declined by 4.16%, year-on-year. Reforms aimed at boosting foreign investment, announced on Friday, lifted the Nifty to its best close since 19th April. All eyes will now be on the key economic indicators like industrial output numbers and inflation data as well as the quarterly earnings season, which kicks off next week.
The Sensex closed the week at 17,521, up 91 points (0.52%) and the Nifty gained 38 points (0.72%) at 5,317. A close below 5,290 followed by a break of 5,265 during the week will make the market bearish; else we may see the upmove going up to the level of 5,450.
The range-bound market closed lower on Monday as fall in exports for the month of May offset the rise in June manufacturing output. While the market opened on supportive global cues on Tuesday, selling in FMCG and IT stocks capped gains. The indices settled with marginal gains on Wednesday on reports of the expansion of the country's services sector in June.
The government's moves aimed at boosting foreign investment lifted the market half a percent higher on Thursday. However, cautiousness ahead of the earnings season saw the Sensex and Nifty closing marginally lower on Friday.
During the week, sectoral indices like BSE Realty jumped 5% and BSE Consumer Durables climbed 4% while BSE IT and BSE Fast Moving Consumer Goods settled 2% lower.
The top gainers among Sensex stocks were Bharti Airtel, Sterlite Industries (up 5% each), HDFC, Maruti Suzuki and ICICI Bank (up 4% each). The key losers on the index were Jindal Steel & Power, Hero MotoCorp (down 3% each), TCS, ITC and Infosys (down 2% each).
DLF (up 6%), Bharti Airtel, Jaiprakash Associates, HDFC and Sterlite Ind (up 5% each) were the top performers on the Nifty. Asian Paints (down 4%), Jindal Steel & Power, Hero MotoCorp, Infosys and ITC (down 3% each) settled at the bottom of the index.
The HSBC India Manufacturing Purchasing Managers' Index (PMI)-a measure of factory production-improved slightly to 55 in June 2012, from 54.8 in May 2012. The June data also signals continued inflationary pressures in India's manufacturing sector as input and output prices rose at a faster pace than in May, keeping inflation high by historical standards.
India's exports declined by 4.16% year-on-year in May 2012 to $25.68.billion, mainly due to demand slowdown in the western markets. Imports too dipped by (-)7.36% in May to $41.94 billion, leaving a trade deficit of $16.26 billion.
The HSBC India Services Purchasing Managers Index (PMI)-an index of Indian services sector activity-rose to 55.7 in June, slightly up from 55.3 in May-registering the fastest expansion of output in four months. The index has moved up for eight months in a row.
Mauritius foreign ministry officials on Thursday said that the Indian government will not take any steps which would hinder Mauritius economic interests. This apart, the finance ministry is working on a proposal to reduce the incidence of withholding tax on external commercial borrowings (ECB) to encourage Indian companies to raise funds from overseas markets.
Earlier this week, Australian brokerage house Macquarie downgraded the Indian IT and financial sector stocks to 'underweight' from 'overweight' due to weaker growth prospects. The move is a bit surprising considering that the better-run IT companies, which leveraged on offering low-cost solutions was once considered a sunrise sector. The brokerage house also reduced financials sector to underweight as it feels that restructuring of assets is likely to continue and may peak only after six months.
On the global front, the US economy created just 80,000 jobs in June while the unemployment rate was unchanged at 8.2%, reflecting continued slow growth in the economy. Corporate earnings and the developments in Europe will be keenly watched by investors in the coming week.
“It doesn’t matter what you want in life, it matters how badly you want it.” — Shahnaz...
Disha provides free, confidential, one-on-one counselling for those who need to understand their finances better, says Seraphina D’Souza
If you are having trouble paying your credit card dues, the worst thing you can do for your own long-term financial health is to ignore it or run away and end up damaging your credit record. But, even if you are not in trouble and simply harried about frequent changes in EMI on home loans, struggling to understand complex financial products, want help on balancing your budgets or are unsure whether you are being charged correct interest and fees, it is now easy to seek expert advice.
Most people don’t know that ignoring financial defaults can become a serious problem. You are marked a defaulter by credit bureaus which makes you ineligible for any loan or credit. Often, you cannot even open a brokerage or demat account. The default remains in the records of credit information companies for seven years. The remedy is to deal with the problem instead of ignoring it. Few people know that it is possible to get competent advice and guidance from trained counsellors absolutely free of cost.
Disha Financial Counselling, a not-for-profit entity set up by ICICI Bank, is one such initiative. It was started at the instance of the Reserve Bank of India (RBI) to help people in financial distress avoid the embarrassment of facing recovery agents. Disha has nine centres across India (Delhi, Ahmedabad, Chennai, Hyderabad, Jaipur, Kolkata, Kanpur, Ludhiana and Mumbai) and you can approach it irrespective of which bank you owe money to. The key is that you should want a solution and are willing to take appropriate steps to solve the problem. You can even approach Disha for guidance, if you have been wrongly reported a defaulter to credit bureau. Dr SD Israni, a director of ICICI Trusteeship Services Ltd, to which Disha reports says, “There is no doubt that it is a very positive initiative. With so many people getting caught in frauds and scams, there is much to do.” However, as he points out, “Much greater awareness needs to be created about the benefits of such counselling.” Strangely, many people lose the benefit of this neutral, independent advice, because they are distrustful or believe that the true state of their finances will be reported to the lender. Some are willing to cough up thousands of rupees to individual consultants with little standing who promise to fix a ‘settlement’ or waiver. Some even pay to merely understand their credit report. It is important to understand that Disha’s counselling is confidential and the discussions will not be used against those who approach it for guidance.
Moneylife Foundation has a tie-up with Disha to provide counselling at our premises in Mumbai with prior appointment. The counsellor, R Gopalakrishnan, a retired deputy general manager of RBI in the consumer services cell, has processed hundreds of applications for appeals against the Banking Ombudsmen’s decisions. He says, “As a counsellor, I try to understand the customer’s point of view first and assure them that the advice will be completely confidential, personal and non-judgemental.” In today’s world, few career-oriented persons can do without a loan or a credit card and one never knows when a default in your credit records can be hugely damaging. If you know someone who is ignoring or running away from a default, do guide them to Disha to get their financial lives back on track. You can even approach Disha to understand how to resolve grievances, understand wrong charges and take them up effectively with banks, institutions or even the Ombudsman. Those in need can even call Disha for free phone counselling at 53030.
Prince Apartments, Ground Floor,Karani Road, Near ICICI Bank, Ghatkopar
(West), Mumbai 400 086.
Contact – 91-22- 65971815/16/17
Email – [email protected] /
305, 3rd floor, Hind Service Industries Premises, Off Veer Savarkar Marg, Shivaji Park, Dadar (West),
Contact – 91-22-24441058/60
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