This week in market may decide its trend
Last week Sensex lost -114 points or -0.65% to 17460 and Nifty lost -32 points or -0.61% to 5237 in the week ended 02-7-2010. Last week market ends flat, Bulls and Bears fight well, but nobody wins and market ends neutral on weekly basis. RBI raise the REPO Rate and REVERSE REPO Rate to control the inflation. Now from end of this week 1st quater results will come, these results may give trend to market. Since last two weeks market is trying sustain on top. Nifty is having good chance to reach on new high, but market is waiting for some proper announcements. Now on this week keep your eyes on 5378 and 5398, If nifty close above these levels then we may see very new high very soon. Nifty support at 5218 on closing basis. If nifty close below 5218 then nifty may touch upto 5109 and more so we advise to exit from longs. Till nifty 5218 we are on bull side.
| INDEX | LAST WEEK | PREVIOUS WEEK 25-6-2010 | PERCENTAGE % (+/-) | POINTS (+/-) |
|---|---|---|---|---|
| SENSEX | 17460.95 | 17574.53 | -0.65% | -114 |
| NIFTY | 5237.10 | 5269.05 | -0.61% | -32 |
The next major trigger for the market is Q1 June 2010 results of India Inc, which will start trickling in from the second week of July 2010. Advance tax collections for the first quarter of the current financial year point to a strong growth in corporate sector profits. Advance tax payments by companies during the April-June quarter account for 15% of the total advance tax payable in the fiscal year.
Investors will also closely watch the progress of the monsoon rains. The India Meteorological Department (IMD) on Thursday, 1 July 2010, forecast that there could be some improvement in the monsoon situation over north India next week. The IMD further announced that the northern limit of the monsoon, which had been remaining stationary since June 18, moved slightly northwards in north Madhya Pradesh covering Bhopal and its neighbourhood.
The monsoon was 16% below normal in June 2010. The situation was the worst in the central and the north-west parts of the country, with deficiencies of 26% and 18%. Uttar Pradesh had the maximum shortfall, with the western part of the state recording a deficiency of 82% and the eastern part 72%.
The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The south-west monsoon usually covers the entire country by mid-July. The weather office expects monsoon rains to be at 102% of the long-period average for the current monsoon season. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation.
The Reserve Bank of India (RBI) is widely expected to increase interest rates at its policy review on 27 July 2010. It raised rates by 25 basis points each in March and in April. RBI Deputy Governor Subir Gokarn on 1 July 2010 said India's economic recovery has been strongly consolidated in the early part of 2010, but the central bank is also watching European developments in the context of its policy making.
The government's latest decision to raise fuel prices will stoke inflation, maintaining pressure on the Reserve Bank of India to tighten monetary policy. The government on 25 June 2010, raised petrol price by Rs 3.50 a litre, diesel price by Rs 2 litre, kerosene by Rs 3 litre and LPG by Rs 35 per cylinder.
The government has decided to decontrol petrol prices. The government will also eventually decontrol diesel prices, Oil Secretary S. Sundareshan said on 25 June 2010. The government will, however, continue to subsidize kerosene and LPG.
The government will unveil industrial production data for May 2010 on 12 July 2010. On 14 July 2010, the government will unveil wholesale price index data for June 2010.
The initial public offer of Hindustan Media Ventures, the publisher of Hindi daily Hindustan, opens for bidding on Monday, 5 July 2010. The company has set Rs 162-175 per share price band for the IPO. The IPO, through which the media house plans to raise up to Rs 270 crore, closes on 7 July 2010. (Data Source: Capitalmarket)
NIFTY WEEKLY CHART
WEEKLY NIFTY SUPPORT 5218 AND RESISTANCE 5378
NIFTY FUT. (5251)
Buy above 5380 Target ????
Sell below 5216 Target ????
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Rupesh Yatesh Dalal
Head Research Team
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