Previous Week : Sensex on weekly basis was down by 60 points
The Indian equities witnessed sharp pullback from support levels during last two trading days of the week and ended Fridays trade on strong note, closing at the highest point of the week. The market started the week on a weak note and closed in red in the first three days of the week but recovered all its losses during the last two days and closed almost flat on weekly basis.
  • The Sensex on weekly basis was down by 60 points or 0.3%, to close at 18266 levels where as the S&P CNX Nifty closed down by 10 points, or 0.2%, to close at 5476
  • BHEL, Tata Motors, Reliance Capital, and Sesa Goa were the major index draggers during last week trade, where as Hero Honda, Kotak Mahindra Bank ONGC and Reliance Industries were the major movers during last week trade
  • During the week, Power Grid reported numbers which were above street estimates but missed the yearly capitalisation targets
  • Tata Steel quarterly numbers were better then our estimates. Tata Motors also declared its results during the week wherein domestic operations performances were below our expectation however JLR surprised positively
  • Food inflation rose to 8.57% for the week ended May 14 (7.47% last week)
  • Nymex crude traded within a tight range of $ 97 -$100/ barrel for the week
  • The week witnessed negative economic data from US. The report from the Commerce Department indicated, a bigger than expected drop in durable goods orders by 3.6% in April following an upwardly revised 4.4% increase in March
  • According to the report, 424,000 Americans filed initial claims for unemployment insurance, an increase of 10,000 from the previous weeks revised figure of 4,14,000
  • A separate report released by the US commerce department shows that the pace of US GDP growth in the first quarter came in at 1.8% (annualised) unchanged from last quarter, which also hurt the sentiments
  • New home sales rose by 7.3% to an annual rate of 3,23,000 from the revised March rate of 301,000
  • In addition, a report from the Richmond Federal Reserve indicated that the index of manufacturing activity slipped to -6 in May from a 10 in April, with a negative reading suggesting a contraction in manufacturing activity
  • During the week, S&P revised downward its outlook for Italys credit ratings to negative from stable
  • In addition, Fitch ratings lowered its credit ratings on Greece to B+ from BB+ citing the scale of the countrys challenge in securing solvency

Week Ahead : FIIs have net sellers to the tune of 5492 crores
Nifty during last week trade bounced after taking support at the long term demand line which has been in place since November 2009, which is placed at 5330 levels. On the weekly chart it has formed a bullish Hammer candlestick pattern which suggests strength and a reversal of the existing trend. A closing above 5520 the Nifty will form a higher top on the daily chart and can test 5605 levels which is the 200 days EMA.
  • Nifty on the lower side crucial support comes at 5410 levels sustaining above which the trend continues to remain positive. Breaching below 5400 levels the Nifty can test last week low of 5330 levels
  • FII in the month of May (up till May 26, 2011),: FIIs have net sellers to the tune of 5492 crores while domestic funds are net buyers to the tune of 4352 crores (provisional data)
  • Amongst the key data globally would be US Chicago purchasing managers index, US construction spending (MoM), US continuing jobless claims, US factory orders
  • On Indian economic data front GDP numbers for Q4FY11 will be declared on May 31, 2011
  • The major companies declaring their earnings next week would be ONGC, BPCL, and IOC