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

Share Market Today

MARKETS CONTINUE RALLY AFTER BRIEF CORRECTION, BANK NIFTY CONTINUES ITS OUT PERFORMANCE; NIFTY RETURNS TO IT’S TRADING RANGE BETWEEN 7500 TO 7750; AFTER A PROCESS OF CONSOLIDATION NIFTY MAY TEST PREVIOUS HIGHS OF 7800.

Take Profits in the Bank Nifty, consider buying the CNX IT if it opens cheerful (higher or at par with today’s close). For the Nifty, you may like to watch the early morning action and take profits at least partially. 

Up move continues in Bank Nifty. Prices have come back in its trading range inside 14900 – 15700. Short Term Trend is up and we should look for a buying opportunity here. Above the next resistance comes near 15600 -15700. 

CNX IT is now holding its support at 9750. A short term resistance is now coming at 9900. It seems that the IT Sector may start an up move from this support. A breakout above 9900 will be first sign that the sector is going to start an up move. Look for a buying opportunity in IT Stocks if this breakout occurs. 

CONSTRUCTION Sector has seen a deep correction and prices are now finding support at the lower levels. Prices may begin an up move from here. We should look for buying opportunity in this sector. Look for a buying opportunity in DLF, HDIL and IRB INFRA.

      
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President addressed a joint sitting of Parliament

President Pranab Mukherjee addressed a joint sitting of Parliament, laying the roadmap of the new government headed by Prime Minister Narendra Modi. The President's speech highlighted the government's economic agenda. In his address in the Central Hall of Parliament, the President listed priorities of the NDA government which include focusing on rural development, attracting foreign investments and taking India back to the path of economic growth. 

Key Highlights: 

·        He said the Lok Sabha elections have been an election of hope with the electorate transcending the boundaries of caste creed and religion to vote in favour of development. According to him, serving citizens should be the government’s first priority.

·        Containing food inflation is a top priority for the government and it plans to tackle it by improving supply-side bottlenecks. 

·       The government will take steps to check hoarding and black marketing. It will also reform the public distribution system. President Mukherjee also said the government is alert to the possibility of below-normal monsoon. "The government is already preparing contingency plans in case there is poor monsoon. Reinstating the policy of ‘minimum government, maximum governance’, he pledged to work to re-establish the credibility of institutions.

·        President Mukherjee also said the government is committed to reviving the agricultural sector and substantial investment will be made for rural asset creation. The government will hike investment in farm infrastructure and will address issues in farm pricing and procurement. It will also launch prime minister’s farm irrigation scheme and will accord high priority to water security. 

·        In the education sector, the president said the government will formulate National Education Policy and set up IIT, IIM in every state. It will also launch national multi-skill mission. The government also plans to digitize records and make an effort to scrap obsolete laws and regulations.

·     It plans to set up Wi-fi zones in critical areas in five years and will roll out broadband highway to reach each village.

·        The government is also planning to formulate a new health policy. It will roll out National Health Assurance Mission and set up AIIMS-like institutes in all states. It will also launch clean, hygienic India mission.

·        The president said social media will be the tool for participative governance. The government will also vigorously follow up black money with foreign governments.

·       President Mukherjee also said the government will encourage private investment in defence production.It will carry out reforms in defence procurement and will liberalise FDI in defence production. 

·        The government also pledged to progressively modernise courts. It is also committed to providing 33 percent women quota in Parliament and will follow a policy of zero tolerance in crime against women.

·        The government has also committed to pursue coal sector reforms to attract investment. It also envisages to have diamond quadrilateral plan for high-speed trains. President Mukherjee reiterated the prime minister’s commitment to take steps to ensure clean Ganga.

·        In order to connect small towns, the government is planning to promote low-cost airports. It will also work to revamp all ports in the country and evolve a model of port-led development. It plans to develop new world-class ports. The government plans to promote cleaner fuels and formulate a clear policy on natural resources.

·        President Mukherjee also said the government will set up National Maritime Authority and will build National War Memorial. It will implement one-rank-one-pension for armed forces.

·        That foreign policy will be an important agenda for the new government was obvious when Modi invited all SAARC heads to attend his swearing-in ceremony. The new government will work with neighbours to revitalize SAARC. It will work to further boost strategic ties with China. It will also boost ties with Japan for infrastructure investment and will build more on relations with Russia. The new government is planning to bring renewed vigour in engagement with the US.