Previous Week : Sensex was up marginally by 109 points to close at 18376 levels
The Indian equities traded in a tight range during last week trade. It started the weak on a positive note but faced heavy selling pressure at higher levels near its 200 days EMA (Exponential moving average) on Fridayā?Ts trade to close the week on flattish note.
  • The Sensex on weekly basis was up marginally by 109 points or 0.6%, to close at 18376 levels where as the S&P CNX Nifty closed up marginally 40 points, or 0.7%, to close at 5516
  • Hindustan Unilever, Larsen & Toubro, Reliance Capital, and Ranbaxy were the major index movers during last week trade, where as Hindalco, Tata Motors, Tata Steel and Mahindra & Mahindra were the major draggers during last week trade
  • OMCs (IOC, HPCL, BPCL) results were better than expectation due to lower sharing of subsidy burden. However, ONGC, OIL India results below expectation on account higher subsidy burden
  • On the economic front, Indiaā?Ts GDP growth in Q4 FY11 was 7.8% (lowest in last 4 quarters) mainly due to a sharp drop in manufacturing growth
  • For FY11, the Indian economy grew 8.5%, just below the government's 8.6% estimate, and up from 8% a year earlier
  • Core sector for the month of April grew by 5.2 % (lowest in last 5 months) The core sector comprises of crude oil, coal, electricity, petroleum refinery, finished (carbon) steel which has 26.7% weight in IIP
  • India's exports for the month of April 2011 stood at $ 23.8 billion while
  • imports came in at $ 32.8 billion. Trade deficit for the month of April narrowed to $ 8.9 billion ($ 11 billion last year)
  • Food inflation fell marginally to 8.06% for the week ended May 21 (8.57% last week) Inflation of fuel items, however, increased to 12.54% (12.11% last week) mainly on account of an over 32% jump in index for petrol
  • Nymex crude traded within a tight range of $ 100 -$102/ barrel for the week
  • For third week in a row, we have witnessed negative economic data from US
  • Major automakers reported weak US vehicle sales for May as General Motors reported a 1.2% drop in May sales while Toyota reported a 33.4% drop
  • Payroll processor Automatic Data Processing reported weaker than expected private sector job growth in May as private sector employment increased by 38,000 jobs well below economist estimates for an increase of about 1,70,000 jobs
  • The Conference Board said its consumer confidence index fell to 60.8 in May from an upwardly revised 66.0 in April
  • The National Association of Realtors said its pending home sales index plunged by 11.6% in April following a downwardly revised 3.5% increase in March mainly due to unusual weather and economic softness
  • Rating agency Moodys warned that it may place the US government's AAA rating under review for possible downgrade if there is no progress on increasing the debt limit in the coming weeks
  • During the week, Moody's Investors Service downgraded Greece's local and foreign currency bond ratings to Caa1 from B1 and assigned a negative outlook to the ratings
  • 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 country's challenge in securing solvency

Week Ahead : Nifty reacted from its 200 day EMA during last week trade.
Nifty as indicated earlier reacted from its 200 day EMA during last week trade. The swift rally since the lows of 5328 to 5600 regions has seen the short term indicators entering the overbought region. Hence any technical throw backs from current levels are likely to get cushion at lower levels around the 50%(5465) and 61.8% (5430) which are fibonacci retracement levels of the recent rise.
  • Upsides on the nifty for the time being appear capped around the 5600-5650 which is an important resistance area marked by the presence of 200 day EMA at 5603 levels and 50% retracement of the entire decline since April'11 highs being placed at 5637 levels
  • We remain cautious in markets so long as we trade below 200 EMA. So we advise not to take aggressive long trading bets till then
  • FII have been net sellers in the month of May to the tune of 5158 crore while domestic funds are net buyers to the tune of 4093 crore
  • For the first two trading days in June, FIIs are net buyers to the tune of 430 crore while domestic institutions are net sellers to the tune of 273 crore
  • Amongst the key data globally would be US MBA mortgage applications, US Initial jobless claims, US continuing jobless claims, European Monetary Unions - ECB rate decision
  • The key data to watch out next week would be IIP numbers on Friday June 10, 2011 and Inflation figures for the week ended May 28, 2011