Upmove stalled: Weekly Market Report

Moneylife Digital Team 25 August 2012

The Nifty may find its first support at 5,295

The market closed with modest gains in the holiday-shortened week, making it the fourth weekly close in the positive. Global cues and positive corporate news supported the gains. However, the stand-off by the opposition in Parliament is expected to weigh on the market, going ahead. GDP data for the June quarter, which will be released on 31st August, will also be keenly watched by investors.

The Sensex closed the week at 17,783, up 92 points (0.52%) and the Nifty settled 20 points (0.38%) up at 5,387. The market is now showing signs of exhaustion. If the Nifty breaches Friday’s low of 5,371, we may see it finding support at 5,295.

Coming back after an extended weekend, the market settled over 1% higher on Tuesday on upbeat corporate news and global support. The market snapped its two-day winning streak on Wednesday on unsupportive global cues and the political stand-off in Parliament.

The benchmarks settled flat on Thursday on pressure from oil & gas and auto sectors. On Friday, the indices settled lower on weak global cues and selling in capital goods and banking stocks.

BSE IT (up 3%) and BSE TECk (up 2%) were the top sectoral gainers in the week while BSE Realty (down 3%) and BSE Oil & Gas (down 1%) stood at the bottom of the index.

Coal India (up 5%), Infosys, TCS (up 4% each), Cipla and Hindustan Lever (up 3% each) were the top Sensex gainers. The losers were led by Bharti Airtel (down 5%), Reliance Industries (down 4%), Hindalco Industries (down 3%), Larsen & Toubro and Tata Steel (down 2% each).

The Nifty was led by Ranbaxy Laboratories (up 7%), Coal India (up 5%), Bharat Petroleum Corporation, Infosys (up 4% each) and TCS (up 3%). The key losers on the index were Bharti Airtel, Reliance Infrastructure (down 5% each), RIL (down 4%), Axis Bank (down 3%) and Hindalco Ind (down 2%).

Retail inflation declined marginally to 9.86% in July due to lower prices of spices, cereals and its products although prices of vegetables remained high during the month. Based on the Consumer Price Index (CPI), the inflation for June 2012 was revised downwards to 9.93% from the provisional estimate of 10.02%.

The deadlock in Parliament is set to enter the second week with no signals of a thaw emerging between the BJP and the government on the CAG report on coal blocks allocation issue. BJP leaders are contending the Coalgate issue has presented them the best opportunity with the CAG speaking of “undue benefits” of Rs1.86 lakh crore in coal block allocations.

On the international front, US Federal Reserve chief Ben Bernanke in a letter to a Congressional oversight panel said, “There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery.” His speech at the annual symposium in Jackson Hole, Wyoming, will be keenly watched for further action from the country’s central bank.

Meanwhile, Greek prime minister Antonis Samaras on Friday said that his country does not need additional funds, but “time to breathe” so that it can return to growth.

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