Previous Week
  • Key Benchmark indices closed at seven month highs as investors are viewing the government's steps on fuel price as a precursor of further positive steps in the coming days.
  • Sentiment was also buoyed by the US Federal Reserve's move to continue with its bond purchase program as part of its policy to infuse liquidity into the banking system and revive the US economy.
  • Nifty closed in green in all the five trading session during previous week trade as the key indices moved from strength to strength as the week progressed.
  • Metals, Banking, Cement, Oil & Gas, IT, Auto, Realty and Capital Goods stocks were the major gainers in the index during previous week trade.
  • India's industrial production barely grew in July, with output edging up just 0.1 percent on an annual basis, as an upturn in consumer durables was offset by contraction in manufacturing and mining industries amid weak external demand.
  • Inflation for the month of August came in at 7.55% which was above market expectations.
  • The US Fed announced a plan to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and vowed to keep policy rates at the near-zero level till 2015. A separate report from the US Commerce Department showed that wholesale inventories rebounded by more than expected in the month of July.
  • Germany's top court cleared the way for the ratification of the European Stability Mechanism, or ESM, rejecting temporary injunctions against the bailout fund and the fiscal compact in its much-anticipated judgment. However, the court imposed certain conditions, including capping Germany's ESM liability to EUR 190 billion and a mandatory parliament nod for further expansion of the country's ESM share.
  • China added stimulus worth more than CNY 1 trillion ($158 billion) as the National Development and Reform Commission (NDRC) approved a slew of infrastructure projects to help the economy counter the global gloom, which has increasingly diluted export gains.

Week Ahead
  • The Nifty on the weekly chart has formed one of the longest bull candles of recent times. In the process the index has formed a higher top and higher bottom in the daily chart. The recent swing low of 5215 it has formed a higher bottom in the chart and on Friday's trade the index closing above August 2012 peak of 5448, has formed a higher top in daily chart.
  • The short term bias will continue to remain positive as long as the index sustains above Fridayâ?Ts bullish gap area of 5450-5530. Any corrective declines towards the same are expected to garner fresh buying support.
  • The index in the coming week will face immediate hurdle in the range of 5630-5650 which is the February 2012 peak and 61.8% retracement of the entire fall from 6335 to 4531 levels. A sustain closing above the resistance level can see the index testing 5740 in the near term.
  • Key data/events to watch globally would be US MBA Mortgage applications, existing home sales and Initial jobless claims.
  • In India the key events to watch out would be RBI Interim Policy and CPI data.