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| November 16, 2012 |
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| We understand the need
for the right research to make smart investment
decisions. To keep you well informed, we present
the market outlook for this week. |
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Previous Week |
| Indian equity
benchmark closed at two-month low as the index
traded with negative bias through out the
previous week and closed in red in all the four
trading session during previous truncated week's
trade. NSE Nifty slipped below the 5600 level
for the first time in November following weak
global cues. Nifty traded in a small range
during the week but faced heavy selling pressure
during the final hour of trade on Friday as the
Nifty cracked below its 50 days EMA for the
first time since September 7, 2012. ACC, Ambuja
Cement, DLF, Hero Motocorp, ITC, L&T, Tata
Motors and Tata Steel were the key draggers in
the index where as Bharti Airtel is the only
major mover among the Nifty
constituents. |
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WPI for October 2012 came in at a
nine-month low of 7.45%, much below market
expectation of 7.90%. Primary articles inflation
stood at 8.21% supported by cooling food prices.
Fuel inflation stayed same at 11.71% as increase
in administered prices was offset by a decline
in decontrolled fuel prices. Manufactured goods
inflation came in lower at 5.95% as against
6.26% (September 2012) dragging headline
inflation lower. Core inflation also came down
to 5.1%. August 2012 inflation was revised
upwards to touch 8.01%. |
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In the week from November
11-November 16, result of SBI was mostly in-line
with estimates. Tata Steel's numbers were muted
while BPCL's result was above
estimate. |
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The US markets were
mostly weak during the week. A report showed
significant improvement in US consumer sentiment
in November. However, concerns about whether the
President and members of Congress will be able
to come to an agreement to avert the fiscal
cliff looming at the end of the year remained.
Another report showed disappointing US retail
sales data for October. |
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Also, minutes of the
Federal Reserve's most recent monetary policy
meeting showed that the central bank is likely
to launch a new bond buying programme next year
following the expiry of Operation Twist.
Further, a report showed that revised jobless
claims data was higher than expected. This along
with the earnings release from Wal-Mart, which
showed lower-than-expected growth in sales, led
to negative sentiment and aided in the low
buying interest in the
markets. | |
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Week
Ahead |
| Nifty on the
weekly chart has formed a long bearish candle
following the bearish shooting star candlestick
pattern of the previous week signifying the
corrective action can continue in the coming
week. |
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The index is extending the time wise
correction to the September 2012 rally as we
have already traded for sixth week of sideways
consolidation while the preceding rally lasted
for about five weeks. The index may continue to
remain in a corrective mode for the coming
week |
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Nifty in the short term
has major support in the range of 5500-5450
levels being the 50% and 61.8% retracement of
the September-October up move and the rising gap
area of September 14, 2012 |
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For any immediate upsides
to materialise the index needs show strength
above the 5650 levels to regain the lost
momentum and head for a re-test of the recent
highs around 5750-5810 levels |
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In the month of November,
FIIs were net buyers to the tune of  2311 crore while DIIs were net
sellers to the tune of 1769 crore. |
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Globally, key data/events
include PMI Manufacturing, MBA mortgage
applications, EIA Crude Oil Price and Initial
Jobless Claims in the US and PMI Manufacturing
and construction orders in the Eurozone.
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| Sincerely,
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| ICICIdirect.com |
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