Weekly View- Index should hold Friday's low

The key benchmark indices declined last week due to steep decline in value of rupee against the dollar and surge in crude oil prices dampened sentiment.  Weak global cues also dented the investors’ sentiment. Market breath was negative with high degree of volatility, Index dropped in three out of the five trading sessions during the week. The market surged in the first two sessions of the week, but witnessed selling pressure in the last three consecutive sessions.  Last week S&P BSE Sensex fell 151.70 points or 0.6% to 25,329.14 and CNX Nifty fell 34 points or 0.45% to 7,568.55 while Mid-cap and small-cap indices underperformed the broder index.

Among key corporate earnings this week are Divi's Laboratories, GAIL (India), HPCL, Indian Hotels Company, SAIL, Tata Motors, Aditya Birla Nuvo, Apollo Hospitals, BEML, BHEL, BPCL, Britannia Industries, Coal India, Engineers India, IOC, Jaiprakash Associates, NMDC, Oil India, Sun Pharmaceutical Industries, Tata Power, GMR Infrastructure, GMDC, IL&FS Transportation Networks, Max India, ONGC, Siemens, Tata Steel ,Voltas, Cipla, Hindalco Industries, Reliance Capital, Reliance Communications.

Last batch of Q1 earnings and key macroeconomic data will set the tone on the domestic bourses in the week ahead. Trading will be truncated next week as the market remains shut on Friday, 15 August 2014, on account of Independence Day. Trend in investment by FIIs, trend in global markets the movement of rupee against the dollar and crude oil price movements hold key.  

On technical front, Short term trend of the markets are down while medium and long term trend continue to remain up.  Pattern suggests that markets could head lower in the near term if it breaks Friday’s low.   But medium term support is around 7450 levels which is very stong support but a close below medium term support levels lead to a larger correction towards the 7100 levels.  As most of the sectors like Metal, Realty, Banks, Mid cap and small cap indices are showing downtrend so we might see some more correction in coming days.  Although there are some sectors are still looking strong and we could see some improvement in sectors like IT, Auto and FMCG.

  

Key data to watch (Domestic):

·         IIP for the month of June and CPI for July on 12^th August 14

·         WPI for July on 14^th August 14

Key data to watch (World):

·         Retail Sales data on 13^th August 14

·         China IIP data on 13^th August 14

·         Jobless claims on 14^th August 14

·         PPI-FD & IIP on 15^th August 14