This week market will decide its further trend, Inflation and Q4 earnings on focus
Last week Sensex lost 539 points or -3.20% to 16292 and Nifty lost -158 points or -3.11% to 4928 in the week ended 11-05-2012. Looking to weekly chart of nifty future, since last 13 weeks nifty holds 5000 level, in last 13 weeks nifty did not close below 5000 any single time. This week nifty gave close at 4931 which we can say its is far from 5000 on closing level. not according to chart nifty is having bottom trend line support at 4825.
On Friday we saw IIP data came very weak and lesser then expected and due to this nifty end on -ve side on Firday at 4931. If nifty close below 4825 for two days then ready for 4622 – 4500 level. If nifty close above 5020 for two days that mean nifty made out the bottom and may raise to 5140-5220 level.
KEEP STRICT SL IN EVERY TRADE NOW FOR NEW POSITIONS AND KEEP SL IN SYSTEM NOT IN YOUR MIND. BEFORE YOU TRADE ON SYSTEM FIRST DECIDE THE SL AND THEN TRADE.
WEEKLY INDEX SUMMARY
INDEX
| LAST WEEK
07-05-2012 | PREVIOUS WEEK
04-05-2012 | PERCENTAGE
% (+/-) | POINTS
(+/-) |
|---|
| SENSEX | 16292.98 | 16831.08 | -3.20% | -539 |
|---|
| NIFTY | 4928.90 | 5086.85 | -3.11% | -158 |
|---|
The market may remain rangebound although stock-specific activity could be witnessed based on Q4 earnings. On the macro front, the government will announce inflation data for the month of April 2012 on Monday, 14 May 2012. The annual rate of inflation based on the Wholesale Price Index (WPI) is seen easing to 6.6% in April 2012, as per the median estimate of a poll of economists carried out by Capital Market. The annual rate of inflation, based on monthly WPI, stood at 6.89% (provisional) for the month of March 2012.
Investors are closely watching India Inc’s Q4 March 2012 and year ending March 2012 (FY 2012) earnings. Focus is on the guidance provided by the managements for the year ending March 2013 (FY 2013) to gauge the earnings outlook.
L&T announces FY 2012 results on Monday, 14 May 2012. Bajaj Auto announces FY 2012 results on Thursday, 17 May 2012. State Bank of India, Tata Steel and Coal India unveil FY 2012 results on Friday, 18 May 2012.
The trend in flows from foreign institutional investors hold key. Investor sentiment has been affected, as government remained adamant on its stance to tighten noose on overseas tax evaders. Finance Minister Pranab Mukherjee reiterated on Tuesday, 8 May 2012, the government’s right to tax overseas transactions of companies that realize capital gains from the sale of their Indian assets. There cannot be a situation where somebody will make huge capital gains on the assets located in India and will not pay tax to either India or the country of its origin by making some arrangements through certain tax haven locations through a complicated setting up of series of subsidiaries, Mukherjee said in his closing remarks during the debate on the Finance Bill. India will not be treated as a tax haven, Mukherjee said.
The Finance Bill 2012 was passed by Lok Sabha on Tuesday, 8 May 2012. The government has proposed retrospective changes that will empower the government to tax transactions that have taken place outside the country, but involve underlying assets located in India. The proposal will have the power to tax retroactively. Mukherjee had clarified early this week that the retrospective amendments do not override the provisions of double taxation avoidance agreements (DTAAs). The finance minister had also clarified that the retrospective amendments would not be used to reopen cases where assessments have been completed.
Critics have slammed the proposal for a retroactive capital-gains tax as contrary to international taxation practices, and a legislative reversal of a Supreme Court decision earlier this year that said such tax on such deals wasn’t allowed.
Mukherjee said in parliament on Monday, 7 May 2012 that the application of General Anti-Avoidance Rules (GAAR) has been deferred by one year until 1 April 2013, giving some short term respite to the foreign investors. (Data Source: Capitalmarket)
NIFTY WEEKLY CHART
NIFTY WEEKLY CHART
WEEKLY NIFTY SUPPORT 4825 AND RESISTANCE 5010
NIFTY FUT. (4931)Buy above 5020 Target 5062-5110-5139
Sell below 4880 Target 4828-4777-4718
-Always Remember, put SL in your every trade.
- Weekly Levels are Closing Basis, so follow on closing time.
Rupesh Yatesh Dalal
Head Research Department
