Previous Week
  • Benchmark indices managed to recoup most of its previous week losses and closed the week up by more then 1.5% on weekly basis. The Nifty traded in a small range with negative bias during the first four trading day of the week but managed to protect its crucial support area of 5200 levels.
  • The index saw the best rally in last two months on Friday, helped by the European Central Bank's initiative to go for aggressive bond buying. The NSE Nifty surged more then 100 points or almost 2% on broad based buying.
  • The 30 share BSE Sensex closed at 17,683.73 up by 302.98 points or 1.74%, while the NSE Nifty closed at 5342.10, up by 83.60 points or 1.59%, week on week basis. Reliance Industries, Tata Motors, TCS, Infosys Technology, Wipro, HCL Technology, State Bank of India, and Hindustan Unilever were the major gainers in the index where as BHEL, IDFC, Jindal Steel & Power and Sesa Goa were the key draggers amongst Nifty constituents.
  • India's trade gap widened to USD 15.5 bn in the month of July. Exports fell by 14.8% YoY to USD 22.4 bn in July while imports stood at USD 37.9 bn, falling by 7.6% YoY.
  • The US Labor Department said productivity increased by an upwardly revised 2.2 percent in the second quarter. It also released a separate report showing a bigger than expected drop in first-time claims for unemployment benefits in the week ended September 1, 2012. U.S. manufacturing activity fell in August at the fastest pace since 2009. The Institute for Supply Management's index of national factory activity fell to 49.6 in August from 49.8 in July. In another worrisome report, construction spending unexpectedly dropped 0.9 percent in July.
  • Moody's Investors Service downgraded the credit outlook on the European Union's AAA rating to 'negative' from 'stable', reflecting the negative outlooks on EU's triple-A rated budget contributors. European Central Bank President Mario Draghi, announced the ECB's new bond buying programme would embark on "outright monetary transactions" or OMTs which will allow the bank to purchase sovereign bonds in the secondary markets. The ECB and the Bank of England both maintained their respective interest rates.

Week Ahead
  • The Nifty on the weekly chart has formed a bullish candle with a sizable lower shadow suggesting support at the 5215 levels. As highlighted in the previous edition the index after testing the rising gap area of August 6, 2012 did manage to bounce back on the last trading day of the week to close comfortably above 5300 mark.
  • Immediate hurdle for Nifty will be at 5350-5360 levels which is the previous breakout area. A sustained move above the said level will be positive and can provide the necessary strength to test the major resistance area of 5450-5470 levels in the coming week.
  • On the lower side Friday's gap up area of 5260-5310 followed by last week low of 5215 will be seen as an immediate support levels and the short term bias remain positive till the index sustain above these crucial levels.
  • Key data/events to watch globally would be US MBA Mortgage applications, FOMC rate decision and Wholesale inventories.
  • In India the key event to watch out would be IIP data and Monthly WPI.