Look out for 5,300 on the Nifty for further direction

Positive global cues helped the market close the holiday-shortened week in the positive and in the green for the second week in a row. However, the gains were restricted as manufacturing as well as services growth in March showed a marginal decline, a signal that the Indian economy continues to face pressures. The fourth quarter results of the just-concluded fiscal, which will start coming in, will be the next big trigger for the market.

Select buying amid intense choppiness on Monday enabled the market extend its gains from the previous week. A strong close in the US on Monday and strong opening in Asia saw a positive opening in Nifty and Sensex on Tuesday, which also supported a green closing for the third day. The market snapped its three-day winning streak and closed lower on the last day of the holiday-shortened week on profit booking and weak global cues.

The Sensex closed 82 points (0.47%) higher at 17,486 and the Nifty added 27 points (0.52%) to close the week at 5,323. It can be seen that the current upmove, which began on 30 March 2012, has lost its strength. The market may see struggled gains ahead. Look out for the Nifty crossing 5,300 for further direction.

BSE Consumer Durables (up 6%) and BSE Capital Goods (up 3%) were the top sectoral gainers in the week, while BSE Healthcare and BSE Auto (down 1% each) were the losers.

Among Sensex stocks, BHEL (up 6%), State Bank of India, NTPC, Larsen & Toubro and Hindalco Industries (up 3% each) were the key performers. Jindal Steel & Power (down 4%), Bajaj Auto, Hindustan Unilever (down 3% each), Maruti Suzuki and Hero MotoCorp (down 2% each) settled lower on the index.

The top gainers on the Nifty were Cairn India (up 7%), BHEL (up 6%), HCL Technologies, Jaiprakash Associates (up 5% each) and SAIL (up 4%). The trailing stocks on the index were Jindal Steel & Power (down 4%), Dr Reddy’s Laboratories, Bajaj Auto, HUL and Maruti Suzuki (down 3% each).

India’s manufacturing sector witnessed the third consecutive month of decline in March as output and new order growth weakened amid power cuts leading to capacity constraints. The HSBC India Manufacturing Purchasing Managers’ Index (PMI)—a measure of factory production—stood at 54.7 in March, down from 56.6 in February. In January, the PMI stood at 57.5.

This apart, the seasonally-adjusted HSBC Services Business Activity Index posted 52.3 in March, down from 56.5 in February. In January, it stood at 58. The HSBC survey further said that confidence sunk sharply since February, largely as “concerns over the latest budget announcement weighed on sentiment.”

Bullion traders and jewellers on Friday called off their 21-day nationwide strike after meeting United Progressive Alliance (UPA) chairperson Sonia Gandhi and finance minister Pranab Mukherjee who assured them that their demand for roll-back of excise duty on unbranded jewellery would be considered. Traders are estimated to have lost Rs20,000 crore due to the strike which began on 17th March after presentation of the Budget on the previous day.

India’s exports grew by an annual 4.2% in February, the slowest in three months, to $24.6 billion. In a sharp contrast, imports grew at a faster rate of 20.6% year-on-year to $39.7 billion in February, leaving a trade deficit of $15.1 billion. Trade gap for the 11-month period stood at $166.7 billion, widening the country’s current account deficit (CAD). The country may miss the target of $300 billion for 2011-12 in the wake of difficult global environment.

In international news, the tough US sanctions on Iran is expected to see a rise in global crude prices, energy experts opined. While the sanctions are led to a decline of 300,000 barrels per day in exports to Iran, experts believe it will add around $10 per barrel of crude.

Meanwhile, the Bank of England left its monetary policy on hold on Thursday, on signs that the economy is gradually on the path towards growth.