Some Kingfisher flights from Mumbai have already been cancelled due to the pilots strike and many more cancellations are to follow
A close below 5,342 may see the Nifty slip to the level of 5,250
The market saw its third weekly close in the positive mainly on hopes that central banks across the world will step in with fresh initiative to spur growth in the light of dismal economic indicators. A fall in India’s headline inflation for July also supported the gains in the holiday-shortened week. Among economic events, July consumer price index (CPI) based inflation, to be announced on Tuesday, will be keenly watched.
The Sensex closed the week 133 points (0.76%) higher at 17,691 and the Nifty added 46 points (0.86%) to settle at 5,366. Going ahead, the market is likely to move sideways. However, if Friday’s low of 5,342 is broken and the Nifty settles below that level, we may see the index slipping to the level of 5,250.
The market closed in the green on Monday on a smart recovery in late trade. A fall in headline inflation for July and supportive global cues ensured a positive close for the second day. All markets in India were closed on Wednesday on account of the Independence Day holiday.
The benchmarks settled lower on Thursday on selling pressure in FMCG, metals and consumer durables sectors. Despite falling to the day’s low following the CAG report, select buying ensured a green close on Friday.
In the sectoral space, BSE Oil & Gas and BSE Auto gained 2% each while BSE Metal (down 2%) and BSE Power (down 1%) were the losers.
The top Sensex gainers in the week were Reliance Industries, Mahindra & Mahindra, Tata Motors (up 4% each), HDFC (up 3%) and Bharti Airtel (up 2%). Hindalco Industries (down 7%), Tata Power (down 3%), Sun Pharma, ITC and NTPC (down 2% each) settled at the bottom of the index.
The Nifty was led by Ranbaxy Laboratories, IDFC (up 7% each), RIL, M&M and HCL Technologies (up 4% each). The top losers were Hindalco Ind (down 8%), BPCL, Tata Power, Ambuja Cements (down 3% each) and NTPC (down 2%).
Hit hard by slowing overseas demand, India's exports in July contracted 14.8% to $22.4 billion in July. Imports too declined by 7.6% to $37.9 billion, leaving a trade deficit of $15.5 billion for the month.
Headline Inflation declined to 6.87% in July as the rate of price rise of the food articles category eased a little. Inflation, as measured by the Wholesale Price Index (WPI), was 7.25% in June and stood at 9.36% in July last year. Meanwhile, food inflation declined to 10.06% in July, from 10.81% in June.
The CAG on Friday charged the government of allocating coal blocks, power projects and land for the Delhi's airport at a pittance, costing the exchequer crores of rupees in lost revenues. Meanwhile, The government rubbished the CAG’s findings that private firms had got “undue benefits” to the tune of Rs3.06 lakh crore in coal, aviation and power sectors, arguing that the calculations were ‘misleading’ and faulty and accused the auditor of not following its mandate.
The BJP has demanded the resignation of prime minister Manmohan Singh taking “moral, political and personal” responsibility for the wrongful loss due to coal block allocations.
On the global front, US stocks settled higher for the sixth week on better-than-expected economic indicators. Analysts opine that the market is likely to face a challenge as September is seen as a month of heightened trading activity coupled with an increase in volatility.
European markets also settled higher as policymakers were making concerted efforts to find solutions to the continent’s debt crisis.
Even though the trend is bullish more convincing evidence is needed to support the bullish cause from here on