Previous Week : The Sensex gained 45.50 points for the week to settle at 16866.97
Indian equity benchmarks traded with high volatility during last week trade and have closed the week on a flat note on weekly basis. Nifty slipped below the psychological mark of 5000 during the first half of the week but recovered during the middle of the week to test the critical resistance area of 5150-5200 on Thursday's trade. It gave up all its intra week gain on the last trading day of the week to close the week with a marginal gain of 0.4%.
  • The Sensex gained 45.50 points or 0.3% for the week to settle at 16866.97 whereas the Nifty ended up 19.45 points or 0.4% at 5059.45 levels
  • L&T, Hero Motocorp, Mahindra & Mahindra and Ranbaxy were the major movers during last week where as Bharti Airtel, State Bank of India, Tata Steel, DLF and Hindalco were the major draggers during last week trade
  • Moody's Investors Services affirming its Baa3 rating for India's foreign currency government debt and its Ba1 rating for local currency debt
  • India's food inflation for the week ended August 27 declined to 9.55% on a week-on-week basis from 10.05% for the week ended August 20 while the fuel price index remained unchanged at 12.55% (last week: 12.55%)
  • Nymex crude increased 3.6% on a weekly basis to close at $89.6 /barrel (on Thursday) on account of weekly inventory decline (in US last week) and possible supply disruptions going ahead as a storm forms near Gulf of Mexico region
  • The week witnessed weak economic data from US, lower growth forecast from ECB and downgrade warnings (China, Japan) from Fitch
  • The unemployment rate held at 9.1%, unchanged from the previous month.
  • The non-farm payroll employment remained unchanged in August, in comparison to a downwardly revised increase of 85,000 jobs in July
  • Markets had been expecting employment to increase by about 60,000 jobs, compared to an addition of 117,000 jobs originally reported for the previous month
  • The ISM's non-manufacturing index rose to 53.3 in August from 52.7 in July against a Street expectation of the index dropping to 51.0
  • ECB on Thursday kept the rates unchanged. However, the European central bank has lowered growth forecast for Euro zone. ECB expects the euro zone economy to grow between 1.4% and 1.8% in 2011 (down from a June estimate of June estimate to 1.5% to 2.3%) and to grow between 0.4% and 2.2% in 2012 (down from 0.6% to 2.8%)
  • Meanwhile, Fitch ratings warned of China and Japan credit rating downgrades

Week Ahead : Index saw a sharp rebound from 4720 level
Index saw sharp rebound from 4720 levels and has tested the critical supply area of 5150-5200 during last week of trade, where it has strong resistance from the falling gap area of 5230-5323 as the index had breached the 21 month old support trend line with such a huge gap, the trendline support will now reverse its role as a resistance in the short term.
  • On the lower side key support levels to watch will be 4940 as the index during the recent pullback has formed a higher bottom around that area
  • A breach of the support level on the down side will signal caution and can test the recent lows in the coming weeks
  • In the month of September till date (September 8) FIIs have bought shares worth 1998 crores while DII were net sellers to the tune of 962 crores
  • Key data to watch globally would be US MBA mortgage applications, US current account (Q2) and US consumer price index
  • In India the key data to watch next week would be IIP, weekly inflation, RBI Monetary Policy