Nifty will remain on an uptrend, as long as, it stays above 8,150
The S&P BSE Sensex closed the week that ended on 15th May at 27,324 (up 219 points or 0.81%), while the NSE’s CNX Nifty closed at 8,262.35 (up 71 points or 0.86%). We had mentioned that Nifty may close the week positively, recovering some of its recent losses.
On Monday, the positive cues from US, which gave out data showing unemployment rate dropping to a near seven-year low of 5.4% and non-farm payrolls increased 223,000 in April 2015 boosted market sentiments. In line with Asian indices, domestic indices too closed in the green. Nifty closed at 8,325 (up 134 points or 1.63%). Rating agency Moody's said credit conditions are likely to improve for rated Indian corporates over the next 12-18 months on the back of upturn in economic activities, government's reform push and transmission of monetary easing.
Nifty was pulled lower Tuesday with the news of insufficient progress on talks between debt-strapped Greece and its creditors and forecast by Japan confirming El Nino's to return this year. The return of El Nino will affect economies that are heavily dependent on agriculture, particularly India, which is already reeling from bad weather. Nifty closed at 8,127 (down 198 points or 2.38%). The Index of Industrial Production data for March 2015, stands at 197.3, 2.1% higher as compared to the level in the month of March 2014.
On Wednesday, Nifty closed at 8,235 (up 109 points or 1.34%). Consumer price index (CPI)-based retail inflation eased to a four-month low of 4.87% in April from a revised 5.25% in March, which created an anticipation of interest rate cut by Reserve Bank of India. Rating agency Moody's said monsoon and global financial volatility will pose additional risks to India's growth this year, but the GDP is likely to average around 7.5% over the next 18-24 months due to improvement in business environment induced by reforms.
Nifty closed Thursday lower, however, made an effort to move higher. Nifty closed at 8,224 (down 11 points or 0.14%). The wholesale price index (WPI) inflation stood at negative 2.65% in April 2015. WPI inflation was minus 2.33% in March 2015. Rating agency Moody's Investors Service said that of the non-financial and infrastructure corporates that it rates in India, the vast majority carry either positive or stable outlooks. The Supreme Court Thursday dismissed a batch of petitions filed by various telecom companies seeking extension of their spectrum licences.
With the positive momentum on most of the Asian bourses on Friday and the higher closing of the US indices on Thursday gave a boost to the domestic indices as well. Nifty closed at 8,262 (up 38 points or 0.46%). Initial jobless claims in the US decreased by 1,000 to a seasonally adjusted 264,000 in the week ended May 9. This is near a 15-year low. India Meteorological Department (IMD) on Thursday gave out its forecast that the southwest monsoon will hit the Kerala coast around 30 May.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were: