Previous Week : BSE Sensex closed at 20039.04 up by 375.40 points or 1.90%, while the NSE Nifty closed at 6064.40, up by 113.10 points or 1.90%.
The Indian equity benchmark traded with high volatility in a narrow range during previous week as gains were mainly led by oil & gas space after the government allowed oil refiners to partially hike diesel prices in a phased manner, which came as a sentiment booster as it will help bring down the subsidy burden. The market in the short term is likely to take directional cues from the quarterly earnings and RBI's policy meet later in the month.
  • The 30 share BSE Sensex closed at 20039.04 up by 375.40 points or 1.90%, while the NSE Nifty closed at 6064.40, up by 113.10 points or 1.90%, week on week basis. Reliance Industries, BPCL, Bharti Airtel, GAIL, DLF, ONGC, NTPC, HCL Technology and ITC were the major gainers in the index where as Bajaj Auto, Hero Motocorp, Ranbaxy, Mahindra & Mahindra, JP Associates, Jindal Steel & Power, Sun Pharma and Wipro were the key draggers amongst Nifty constituents.
  • The week started on a good note for the Indian markets after a slower-than-expected rise in inflation strengthened hopes that the central bank will cut interest rates later this month. Sentiment was also supported after India delayed the implementation of controversial rules on tax avoidance ie GAAR to 2016, helping remove uncertainty about whether foreign investors would continue their strong buying of domestic equities. Later during the week, the government partially deregulated diesel price allowing oil companies to increase diesel prices by 40-50 paisa per litre per month to the retail customers, while selling at the market rates to the bulk customers, which further helped the sentiment.
  • Among the Sensex companies, Bajaj and TCS surprised the street with the better than expected results while Hero Motocorp and Wipro disappointed. HDFC bank and ITC released their results which were in line with the estimates.
  • Brent crude closed at $111.98/barrel rising by 0.2% on a weekly basis (as on Thursday).

Week Ahead : FIIs were net buyers to the tune of 11391 crore
Nifty on the weekly chart has formed a bullish candle recouping all its previous week losses. The index managed to hold onto its previous week lows and bounced back thus continue to form higher peaks and higher trough in the weekly chart.
  • The index movement since mid-December 2012 has occurred in a narrow rising channel. The minor negative divergence on the 14 period RSI during this period has led to increased choppiness within this narrow channel. The confluence of key immediate supports is placed around the 5960-5920 band being the value of 21 day EMA at 5960. This also coincides with the lower band of the narrow rising channel and the recent bullish gap area placed between 5935 and 5919. Bulls need to hold this support region in order to keep the short-term positive bias intact.
  • On the higher side, we expect the index to move towards the 6170-6200 regions being the upper band of the medium term rising channel in place since June 2012 and 100% price extension with the November-December 2012 up move.
  • In the month of January (till January 17), FIIs were net buyers to the tune of 11391 crore while DIIs were net sellers to the tune of 9130 crore.
  • Among the Sensex companies, Maruti Suzuki, HDFC, Hindustan Unilever, L&T and NTPC are expected to announce their quarterly results in the coming week.
  • Key data/events in the coming week include initial jobless claims and MBA mortgage applications and Euro Area third quarter government debt and PMI data in the Eurozone.