Previous Week : BSE Sensex closed at 19781.19 down by 1.60%, while the NSE Nifty closed at 5998.90 down by 1.30%
The Indian equity benchmarks traded with negative bias throughout the week as it closed in red in all the five trading session during previous week trade. The Nifty opened the week on a cautious note and traded in a narrow range, the index witnessed a spurt after the RBI announced a 25 bps cut in its key policy rate and hit fresh two year highs. However, broad based profit bookings at higher levels in the second half of the week saw the indices giving up all its gains and closed near the week's low.
  • The 30 share BSE Sensex closed at 19781.19 down by 322.30 points or 1.60%, while the NSE Nifty closed at 5998.90, down by 75.75 points or 1.30%, week on week basis
  • Axis Bank, Coal India, Cipla, ITC and Punjab National Bank were the major gainers in the index where as Bharti Airtel, HDFC, HDFC Bank, L&T, Jindal Steel & Power and State Bank of India were the key draggers amongst Nifty constituents
  • The market sentiment during the week was mainly driven by RBI policy announcement & January derivatives expiry
  • The markets started the week on a flat note on anticipation of a 25 bps rate cut by RBI on Tuesday. Later on the markets remained volatile and ended mostly lower after the RBI reduced repo rate by 25 basis points, as expected widely and also unexpectedly reduced the CRR rate by 25 basis points, but signalled there was less room for aggressive cuts in future
  • The expiry of January derivatives kept trading volatile towards the end of the week
  • Among the Sensex companies, Bharti and Sterlite Industries announced their results which were in line with our estimates but BHEL disappointed on the result front

Week Ahead : Sun Pharma and Cipla expected to announce their quarterly results
Nifty on the weekly chart has formed a bearish candle which closed below the low of the previous week hanging man candlestick pattern. It signifies a follow up to the previous week bearish pattern and suggests some profit booking in the short term and a change in view is seen only on closing above the 6120 in near term.
  • The dwindling market breadth over the past few weeks indicates a visible discord between broader markets and the benchmarks as the midcap and small cap indices are already languishing below the December lows
  • The persistent negative divergence on the 14 period RSI on the daily chart further warrants caution at higher levels as it hints towards bulls tiring out after climbing to two-year highs
  • Over the last couple of weeks, the trading range has narrowed down to 6110-5988 being the upper and lower band of the rising wedge
  • The violation of the rising wedge pattern and immediate swing low (5988) on the downside, would be confirmed on a sustained close below 5988 and would signal a short-term reversal leading to downsides towards the 5900-5830 region
  • Only a strong close above 6120 being the upper band of the rising wedge pattern with significant improvement in overall market breadth will bring the bulls back in the reckoning
  • In the month of January (till January 24), FIIs were net buyers to the tune of 20410 crore while DIIs were net sellers to the tune of 17542 crore
  • Among the Sensex companies, Hindalco, Sun Pharma and Cipla are expected to announce their quarterly results in the coming week
  • Key data/events in the coming week would be the GDP data and India January Market services PMI
  • Overseas markets would be looking out for factory orders, initial jobless claims & MBA mortgage applications in the US and interest rate decision in the Eurozone