Previous Week : Sensex fell by 108 points to close at 18268 levels
The Indian equities continued to trade choppy & volatile in a narrow range during last week trade. The week on a positive note and closed in the green in for first two days of the week but faced selling pressure for rest of the week to close the week marginally in the red.

The Sensex on weekly basis fell by 108 points or 0.6%, to close at 18268 levels where as the S&P CNX Nifty fell marginally 30 points, or 0.6%, to close at 5486. TCS, Cipla and Infosys Technology were the major index movers during trade last week, where as Hero Honda, Ambuja Cement, ONGC and State Bank of India were the major draggers during last week trade.
  • On the economic front, Indiaā?Ts Index of Industrial Production (IIP) numbers for April 2011 as per the new series grew at 6.3% versus 13.1% YoY
  • The data was the first of a new series which includes 45% more items and has 2004-05 as its base year
  • As per the old series IIP growth was 4.4% in April 2011 compared with 7.3% in March 2011 and a median forecast for a 5.5% rise in a Reuters poll
  • A high base effect (16.7% IIP in April 2010) has partially contributed to the weak numbers
  • As per the old series, growth in manufacturing, which constitutes about 80% of the index weight, nosedived to 4.4% in April from a high of 18% in the same month last year
  • Mining also grew by a meagre 2.1% during the month under review as against 12% in April, 2010
  • Growth in electricity production also dipped to 6.4% in the month under review from 6.9% in the same period of the previous year
  • Another area of concern was the low off take of capital goods, whose production growth was just 2.5% in April, 2011, compared to 64.1% in April last year
  • Overall, consumer goods also saw the growth rate slow to 5.9% in April from 11.9% in the same month last year, as per old series
  • Meanwhile, as per the new series, manufacturing growth in April stood at 6.9 %, while mining and electricity production was up 2.2% and 6.4%, respectively
  • Capital goods registered a growth of 14.5% and overall consumer goods were up by 2.9% in April as per the series with a base year of 2004-05
  • Food inflation jumped to a two-month high of 9.01% for the week ended May 28 on the back of costlier fruits, onions and protein-based items
  • Fruits became 30.78% more expensive year-on-year, while onions were up by over 14%
  • During the week under review, milk prices were up by 8.49% and egg, meat and fish became dearer by 6.99%
  • Cereals also became costlier by 5.77% on an annual basis. However, the prices of pulses went down by 9.49% YoY, while vegetables and potatoes became cheaper by 0.20% and 2.87%
  • Nymex crude traded within a range of $ 99 -$101/ barrel for the week. The OPEC members met on June 8, 2011 were unable to reach a consensus on output quotas
  • In US, a report by the labour department stated that the unemployment rate unexpectedly edged up to 9.1% in May from 9.0% in the previous month
  • Another report by the Institute for Supply Management showed acceleration in the pace of growth in the service sector that eased some concerns about the economy
  • During the week the Fed chairman Mr.Bernanke indicated at the International Monetary Conference in Atlanta that the Fed is likely to leave accommodative monetary policy in place due to slower than expected economic growth
  • He further said most Fed members see the recent increase in inflation as transitory and expect inflation to remain subdued
  • The European Central Bank (ECB) and Bank of England (BoE) have kept interest rates unchanged. However, the ECB president has signalled an increase in the rates from next month

Week Ahead : Nifty is likely to remain choppy and volatile
Nifty is likely to remain choppy and volatile as long as the index prevails in the current trading band of 5450-5600 levels. Even the short term technical indicators are not illustrating a clear picture as they remain ambivalent and may support either side movement. A decisive move on the either side of the aforementioned range would see the next 100 odd point rally in that direction.
  • A firm close above the 200 day EMA placed at 5600 levels would provide the necessary impetus for the bulls to push the index towards 5700 plus levels
  • Whereas on the flip side a sustained breach of the 5435 (61.8% retracement of the recent pullback) would cast a shadow on the current pullback attempt and a revisit of the 5330-5300 region
  • During June 6 - 9, 2011 FIIs were net sellers to the tune of 64 crore while domestic institutions were net buyers to the tune of 310 crore
  • Amongst the key data globally would be US retail sales, US Industrial Production, US unemployment claims and housing starts, UKs and Europes CPI and Euro Industrial Production
  • The key data to watch out for, in the next week would be Wholesale Price Inflation Data for May on Tuesday June 14, 2011, advance tax numbers on Wednesday June 15, 2011 and monetary policy meeting on Thursday June 16, 2011