Markets move up further
The week gone by saw the Nifty moving up further. The index crossed its recent highs of 5378 in the process. It was the third consecutive week of gains for the Nifty as it gained 0.86% W-o-W.
Key Events
Global Markets
- US personal spending increased 0.8% in February. Meanwhile, personal income grew by 0.2%.
- The Chicago Purchasing Managers' Index for March fell to 62.2, down from 64 in February and below expectations of 63.
- The March edition of the University of Michigan Consumer Sentiment Index rose to 76.2, from 74.3 in February.
- After stabilising at 2.7% over the previous three months, inflation decreased to 2.6% in March in the Eurozone. Going forward, inflation should continue to moderate, although at a slower pace than previously expected.
- Retail sales in Germany fell for the second month in a row in February, disappointing analysts' forecasts for a rise. Retail sales dropped by 1.1 percent in February compared with January in price, seasonally and calendar-adjusted terms. Consumer confidence had edged higher since the start of the year and the labour market showed signs of further strength, leaving a quite favourable scenario for future spending.
- The euro zones $13 trillion economy is shrinking, data published Tuesday showed, a development that threatens to worsen a global slowdown and intensify the debate about Europes attempts to restore confidence in the currency union. Economic activity in the 17-country currency bloc fell at an annualized rate of 0.7% in the second quarter after stagnating in the first three months of 2012, according to the European Unions statistics arm.
- The US Producer Price Index rose 0.3% in July, above expectations for a 0.2% rise, as food prices rose 0.5% and the core PPI rose 0.4%, offsetting a 0.4% decline in energy price. Despite the larger-than-expected increase in the overall PPI, the largest since February, the year/year rise for that measure slowed further to 0.5%, the slowest 12-month rate since a 2.0% decline in October 2009.
- U.S. factories made more cars, computers and airplanes last month, a hopeful sign that manufacturing is recovering after a weak spring. Industrial production, which includes output at factories, mines and utilities increased 0.6 percent in July from June, the fourth straight monthly increase, the Federal Reserve reported Wednesday. Factory output, the most important component of industrial production, rose 0.5 percent, the second straight increase. Factory output has risen 21.9 percent since its recession low hit in June 2009 and is just 1.7 percent below the pre-recession peak for factory output reached in April 2007.
Indian Markets
- Indias wholesale inflation unexpectedly fell in July to a near three-year low but economists doubt the drop will be enough to persuade the RBI to cut interest rates at its September meeting to try to revive the struggling economy. Inflation dropped to 6.87 percent in July from 7.25 percent in June as domestic petrol and vegetable prices fell in July.
- Private Equity (PE) investments in the country have fallen by 35% to $1,616 million across 97 deals in the second quarter of 2012 over the same period a year ago.
- Indian industry's merger and acquisition deals in July dipped 43% year-on-year to $2.09 billion.
- Maruti Suzuki will restart production at its Manesar factory on August 21, about a month after it shut the plant following a riot.
- Tata Consultancy Services has agreed to buy Computational Research Laboratories (CRL), a start-up group company, for 1.88 billion rupees.
- BGR Energy Systems Ltd has downscaled its proposed investment to set up a boiler and turbine plant by around 20 per cent to Rs 3,500 crore.
- India's annual exports fell 14.8% to $22.4 billion in July, while imports fell 7.79 percent to $37.9 billion, leaving a trade deficit of $15.5 billion.
- ONGC has made a crude oil discovery in an exploration block in Tamil Nadu.
Key Sectoral Movement
The sectoral indices ended with a mixed bag. While the top gainers were the BSE Oil and Gas, Auto, CD and Capital goods indices, the top losers were the BSE Metal, Power, FMCG and Realty indices.
Outlook
While the markets seem to be consolidating at current levels in the last few sessions, the underlying trend remains up. Immediate upside targets for the Nifty in the coming week are at the next resistances of 5400-5445. Weakness could emerge if the immediate supports of 5341 are broken.