Nifty will be in a downtrend if closes below 6,400

The Indian market broke the three weeks of positive closing. The BSE 30-share Sensex closed the week that ended on 14th March, at 21,809.80 (down 110 points or 0.50%), while the NSE’s 50-share Nifty closed at 6,504.20 (down 22 points or 0.34%) for the week.

On Monday, the uptrend on the benchmark paused on weak global data. The Nifty closed at its all time high of 6,537 (up 11 points or 0.16%). China’s exports in February fell 18.1% from a year earlier while the imports rose 10.1%, yielding a trade deficit of $23 billion ($25.4 billion) for the month versus a surplus of $32 billion in January and the inflation rate was 2% for February. On the other hand, Japan's economy expanded less than estimated in the fourth quarter and the current-account deficit widened to a record in January 2014.

On Tuesday, the market snapped the five days of upmove by closing in the negative. Nifty closed at 6,512 (down 25 points or 0.39%). The Indian government unveiled the trade data for February 2014. India's trade deficit narrowed to $8.13 billion in February 2014, from $14.12 billion in February 2013. Total imports declined 17.09% year-on-year in February 2014. Merchandise exports fell 3.67% year-on-year. The trade deficit for the 11-month period April 2013 to February 2014 narrowed to $128.08 billion, from $179.92 billion during the period from April 2012 to February 2013.

Against the negative closing of the US indices on Tuesday and the Asian indices on Wednesday, benchmarks back home managed to stay in the positive. Nifty closed at 6,517 (up 5 points or 0.08%) on Wednesday. In US, the Labor Department said that employers posted 3.9 million job openings in January, up 1.5% from December; however, the increase fell short of what the market was expecting.

The indices were pulled lower on Thursday on the negative performance of the software stocks. Infosys warned that its March quarter earnings will come at the lower end of guidance. However, the improved economic data (index of industrial production and inflation based on the consumer price index) helped reduce the weakness. Nifty closed at 6,493 (down 24 points or 0.37%).

Back home, the inflation based on the wholesale price index (WPI) eased to 4.68% in February 2014, lower-than-expected nine-month low. On the other hand, the weak economic data from China on Thursday made at least four investment banks lowering forecasts for China's 2014 economic expansion which affected market sentiments. Nifty closed at 6,504 (up 11 points or 0.17%).

The economy can grow an annual 5.2% in the quarter to end-March on higher farm output growth, the chairman of the Prime Minister's Economic Advisory Council said on Friday. C Rangarajan also said he foresees the economic growth to pick up to 5.5% to 6% in the fiscal year that begins on 1 April 2014.

For the week, among the other indices on the NSE, the top two performers were Realty (2%) and Infrastructure (1%) while the worst two performers were IT (6%) and Metal (4%).

Among the Nifty stocks, the top five stocks for the week were IDFC (9%); BPCL (6%); Kotak Mahindra Bank (6%); Hero MotoCorp (6%) and IndusInd Bank (5%) while the top five losers were Infosys (9%); Sesa Sterlite (8%); Tata Steel (8%); Hindalco Industries (8%) and Ranbaxy Laboratories (7%).

Of the 1,411 companies on the NSE, 578 companies closed in the green, 792 companies closed in the red while 41 companies closed flat.

Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were: