Weekly Market Analysis (28 June - 2 July)

Dear All,
Benchmark Indices Nifty & Sensex both closed absolutely flat on a WoW basis last week in what was a eventful week. Markets witnessed a range-bound movement throughout the week admist choppy movements.

Globally,

Earlier Last week, contrary to world expectation, China unlocked the value of Yuan & announced a Flexible Yuan policy thereby allowing it to appreciate in value. This bought about a buoyant mood in the world market at the beginning of the week.

Fed policy makers left the overnight interbank lending rate target unchanged in a range of zero to 0.25 percent. Fed echoed that low inflation, stable price expectations and high unemployment “are likely to
warrant exceptionally low levels of the federal funds rate for an extended period.”

For the week ended 25th June 2010,

Change in Global Markets:
US markets: 3-4 % down
European Markets: FTSE down 3.8%, CAC down 4.54% & DAX down 2.35%.
Asian Markets: HangSeng up 2.1%, Shanghai up 2%, Nikkei down 2.58%, Kospi up 1%.

In our Markets Last Week,
Sectors such as Oil & Gas, Realty & FMCG outperformed the indices while IT & Banking sector witnessed deep cuts.
OMC stocks gained anywhere between 10-15% on Friday itself. Stocks such as ONGC & Sun-Pharma gained approx 5-6%. While RCom, HUL & Maruti gained 3-5% on an weekly basis. IT majors faced selling pressure & were down between 3-4% each. Banking Stocks were the hardest hit with SBI & HDFC Bank facing cuts between 2-4%.
Much awaited OMC policy was announced by Government on Friday. It caused the Oil & Gas sector to outperform all the other indices by leaps & bounds. Public sector oil marketing companies (OMC) surged the most after petrol prices were increased by Rs 3.50 a litre and diesel price by Rs 2 a litre, as part of a plan to move towards a market-determined fuel price regime. OMC stocks may even see an earnings upgrade by 20-25% based on the policy itself. Under-recoveries of oil marketing companies for the financial year without this decision were estimated at Rs 72,000 crore . This decision will help bring it down by about Rs 21,000 crore to Rs 53,000 crore. This (Rs 53,000 crore) will be borne by the government and upstream oil companies.
Fundamentally, Automobile & Banking Sector will be the hardest hit sectors as Rising Fuel prices may dampen Sales demand & Rise in Inflation due to rise in fuel prices may prompt the RBI to take some action on the Interest Rate front. Fuel Price rise may have an approx impact of 90-100 bps on WPI index. This policy may also put pressure on the Bond Markets.
Automobile & Cement Stocks would see some action as companies will announce June Sales volume data in early July 2010. Even Progress of the monsoon will also be closely watched.

Last Week,
Nifty opened positive on the back of Positive opening of its Asian peers due to Chinese flexible Yuan Policy news. But ended the week near its weekly low on the back of profit-booking post OMC policy announcements.

Nifty Future Analysis :
PCR is 1.49 indicating mild bearish sentiment. Options Concentration for the week has shifted to 5200 Strike Put option & 5400 Strike Call option indicationg the possible range of 5200-5400 for Nifty.
Nifty Fut has immediate support at 5244. If breaches & sustains below it, will fall upto 5176 & 5129.
On the other hand, Nifty Future faces critical resistance in the zone of 5339-5359. Above which levels of 5398/5435 are achievable

Regards,
Team Market View Investments.

Nifty View (25/06/2010)

Nifty Fut CMP 5282. If does not break 5265, will bounce back upto 5315 & 5339.

Nifty Levels (24/06/2010)

Nifty June Fut Kisses below 5300. 5346 to CMP 5294... Now if reaches 5289 & sustains below it, it will fall all the way upto 5249. If not bounce back possible...

Nifty View (23/06/2010)

Nifty is on weakish note. It May slide further upto 5279 & 5249 if 5303 is breached & sustain below it. Use yesterday's Revised SL 5326 to hold shorts

Nifty View (22/06/2010)

Nifty STBT 5360 to 5330. Book partial & Revise SL to 5349.

Going Forward,
Nifty can slide upto 5320-5316.
If it holds 5312, may bounce back upto 5380/5415.
Below 5312, It may well fall upto 5279

Weekly Market Analysis (21/06/2010 to 25/06/2010)

Profit Booking Likely at Higher Levels

Last Week, Both Sensex & Nifty advanced 2.96% & 2.79% respectively for the week backed by the higher Advance Tax paid by the Front Line Companies for the First Quarter Ended June 2010 & Rally in global markets. Advance tax collections were higher by 35-40% in some cases whereas average rise is 20%.

Globally,
Rally in Global Stocks was aided on account of the easing of the Euro Zone Debt worries after a successful Spanish Government Bond Auction on Thursday.

For the Week ended 18th June 2010,
Change in Global Markets:
US markets: + 2.5-3 %
European Markets: FTSE up 1.8%, CAC up 3.71% & DAX up 2.79%.
Asian Markets: HangSeng up 2.1%, Nikkei up 3%, Kospi up 2.14%, Taiwan up 4%.
Euro registered its strongest weekly gain since September 2009 rising from 1.2112 to 1.2388.


In our Markets Last Week,

IT, Capital Goods, Realty & FMCG sectors were the out performers. While Metal & Oil Gas Stocks Once again proved to be draggers. Cuts in Oil & Gas Stocks were on account of the postponement of EGOM (Empowered group of Ministers) meeting with respect to Free Fuel Pricing as some Ministers within the group being against any kind of Price Hike.

Markets cheered the news regarding Global rating agency FITCH Ratings raising India’s Local Currency rating to Stable from Negative. It even upgraded India’s Growth Forecasts to 8.5% from its earlier forecast of 7%.

WPI based Inflation rose by 10.16% in May vs 9.59% in April. RBI is maintaining a liberal stance on raising the Interest rates. It can be observed by the speed with which the rates where cut during 2008-2009 due to the liquidity crisis (Sub-Prime) & despite the World Economy & Indian Economy rebounding and showing signs of growth & exuberance, RBI is not raising the growth rate with the same speed or not even bringing the rates back to normal as were before the crisis.

DTC draft 2.0 was announced earlier last week. It proposes to Taxing gains from investment in Stock Markets & also Equity Linked MF units at the applicable rate of taxation. DTC 2.0 states that the STT will stay & rates will be calibrated. In first draft DTC unveiled last year Government proposed to scrap STT. DTC also proposes to tax income on Foreign funds treating all incomes from their investments in the Stock Market in India as Capital Gains.

RIL AGM fails to cheer the markets as shares of RIL & ADAG pack fell after Mukesh Ambani gave no details of reconciliation between the two brothers at the AGM. Expectations were so unrealistic & high, the outcome of the AGM failed to cheer the markets & as a result of which RIL slipped approx 3.5-4% from the day high. Even ADAG goups stocks were battered with RNRL & RelCap slipping 7-8% & 4% respectively.

Last Week,
Nifty Future crossing 5176 went upto 5297.
On Thursday Nifty Fut made a high of 5297 & Friday 5296.8.
We feel the current upside of the rally is capped. But there can be stock specific activities going ahead as the small caps & mid-caps still have some catching up.

If Nifty fails to cross 5298-5320, We can see a slide upto 5179. Below 5168, Levels of 5080/5063 can be seen.
If Nifty crosses & sustains above 5320, will move upto 5394/5438.
Be cautious in all Long Positions ahead of expiry.

Nifty Fut shorted at highs of 5290 with SL 5320. Booked partially at 5250 on Friday.
Risk-Takers can again short at highs of 5290-5295 with 5320 SL.

Regards,
Team Market View Investments.
9987750901

Nifty Levels (18/06/2010)

Nifty Future will find support at 5246 & 5218.
Upper Resistance will be capped at 5288 & 5307

Positional Nifty View - 17/06/2010

Dear All,
After a roller coaster ride from 5056 to 5297,
Nifty CMP : 5288/5290...
We feel the current upside of the rally is capped.
This may be the end of the rally. Prefer booking Longs at all rises.
There can be some stock-specific activities going ahead as the mid-caps & small-cap still have some catching up..Though Index may remain stagnant with a downward bias.
Nifty will face tremendous selling pressure from 5298-5319 area.
Be cautious in all Long positions ahead of expiry.
Only High Risk Takers Can go short with 5320 SL

Regards,
Team Market View Investments
9987750901

Nifty View (17/06/2010)

Nifty Resistance - 5239 & 5253
Support - 5209 & 5184

We are continuously cautioning everyone about 5248-5253 levels acting
as a stiff resistance.

Again Today 5238 to 5207...Revise SL for positional shorts at 5253.

Sent Yesterday : http://mktviews-nifty50.blogspot.com/2010/06/nifty-view-16062010.html

Nifty View (16/06/2010)

Sent Yesterday : Nifty Fut CMP 5243. If does not cross 5248 today or tomorrow, Expect minimum 5150 & 5060.

Check the post on : http://mktviews-nifty50.blogspot.com/2010/06/nifty-view-15062010.html . Visit the 2nd Last Comment.

Check today's high 5248.7......If it does not break, Expect a good Downside !!!