A close above 5,500 on the Nifty may add more strength to the current up move

The indices back home moved with mostly in the positive zone on Friday except for a plunge in the red during the noon session when they hit their day’s low. However, near the end of the session, these indices made a smart recovery to hit a four day high (including today).

Both Sensex and Nifty had a positive opening for the second consecutive session. The Sensex opened at 18,425 while the Nifty opened at 5,407. The Sensex moved in the range of 18,273 and 18,679 and closed near the day’s high at 18,620 (up 219 points or 1.19%) which is also its 11-day closing high. The Nifty moved in the range of 5,360 and 5,493 and closed near the day’s high at 5,472 (up 63 points or 1.16%). The National Stock Exchange (NSE) broke the past five day trend of rising volume, it recorded a volume of 77.11 crore shares.

Among the other indices on the NSE, the top five gainers were, Dividend Opportunities (2.11%); PSU Bank (2.00%); Finance (1.94%); Pharma (1.92%) and Media (1.79%). While those which fell were Metal (2.06%); Commodities (0.41%); Realty (0.13%) and Auto (0.03%).

Of the 50 stocks on the Nifty, 28 ended in the green. The top gainers were Bajaj Auto (5.26%); Cipla (5.05%); TCS (4.26%); HDFC (4.24%) and Hindustan Unilever (4.20%). Jindal Steel & Power (9.22%); Grasim (3.16%); Ranbaxy (2.63%); Tata Steel (2.53%) and Hindalco (2.43%) were the top losers on Friday.

Prime Minister Manmohan Singh, today said, that the crashing value of the rupee was part of a needed adjustment that would make Asia's third-largest economy more competitive. The prime minister promised his government would reduce the "unsustainably large" current account deficit undermining the currency. The prime minister also ruled out reversal of reforms or resorting to capital controls to rescue the sliding rupee, which he said fell on account of domestic as well as global factors. "To some extent, depreciation can be good for the economy as this will help to increase our export competitiveness and discourage imports," he said.

Yesterday, finance minister P Chidambaram, while speaking at the Third Parliamentary Consultative Committee Meeting of his Ministry had said that banks must ensure flow of credit to every sector of industry. He said that bankers have been told to be sympathetic and have humane approach towards genuine defaulters. He said that this is time for hand holding of borrowers who are facing difficulties, especially industry. He said that genuine defaulters and willful defaulters need to be dealt with separately. We have to be strict with willful defaulters, he added. The subject matter for the discussion of the meeting was NPAs in Public Sector Banks (PSBs) and measures taken to contain them.

The Forward Markets Commission (FMC), which regulates the commodity futures market in India, has raised the initial margin on gold futures to 5% from 4% for domestic traders effective 2 September 2013. The FMC move comes after gold prices rose 18% to reach a record high earlier this week. The FMC also imposed an additional 5% margin on gold, silver and crude oil futures contracts from 2 September 2013.

On the similar ground, India is considering a plan to direct commercial banks to buy gold from ordinary citizens and divert it to precious metal refiners in an attempt to curb imports and bring stability to the currency. A pilot project, initially limited to big gold portfolios, will be launched soon.

US stocks rose on Thursday as data showed the economy expanded at a faster pace in the second quarter and concerns over Syria eased. Gross domestic product rose at a 2.5% annualized rate, up from an initial estimate of 1.7%, Commerce Department figures showed Thursday in Washington. Jobless claims in the week ended August 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said.

Except for Nikkei 225 (down 0.53%) and Straits Times (down 0.30%) all the other Asian indices closed in the green. Jakarta Composite was the top gainer, up 2.23%.

Japan's consumer prices increased at the fastest pace since 2008 in July, adding to signs that Prime Minister Shinzo Abe is making progress in pulling the economy out of 15 years of deflation. Consumer prices excluding fresh food climbed 0.7% from a year earlier, the statistics bureau said today in Tokyo.

The prospect of imminent military strikes on Syria receded as the UK and France said they favor waiting for the results of a United Nations investigation into alleged use of chemical weapons. The UK Parliament has voted against the use of force in Syria. The US which says it has evidence that Syria's government was responsible, won't act without allies, Defense Secretary Chuck Hagel said. Meanwhile, the White House told US congressional leaders that a potential strike on Syria would focus on removing the regime's chemical-weapons capability.

European indices were trading in the negative while US Futures were trading in the green. Market now awaits the data on unemployment and consumer confidence from the euro zone.