On the back of positive global cues and buying seen in heavy weight counters, the Indian markets opened higher last week. But profit booking and thin volume trades made the markets remain range bound despite, Friday when a breakout was seen.
Markets closed up around 2.2 per cent each on a weekly basis whereas the Bank Nifty closed up around 2.6 per cent. The mid cap and small cap sectors closed up around 3.1 per cent and 3.8 per cent respectively. The major technical indicators are suggesting further uptrend and Nifty can test 8500 levels in the short term. Support for the Nifty is at 8310 and 8265.
Foreign investors had made a investment of around $ 2 billion which takes the total investment to the Indian capital markets to a level of $ 42 billion since January 2015.
As per data, during the December 1 to 26 period, the net investment by foreign investors into equities stood at $ 116 million (Rs 553 crore) while the total inflows in the debt markets was at $ 1.94 billion (R 12065 crore).
This year, the net investment by FIIs into equity market reached $ 16 billion (Rs 96573 crore) while for debt markets the figure is at $ 26.4 billion (Rs 2.6 lakh crore) making a total of $ 42.4 billion (Rs 2.56 lakh crore).
The government last week, approved an ordinance to amend the Land Acquisition Act which will remove the barriers in the sectors like power, roads, defence and housing projects that have been stalled.
The minister said that the projects in defence, rural electrification, rural housing and industrial corridors would not need to seek the consent of 80 per cent of the affected landowners as mandated.
The cabinet was also seen clearing an ordinance for making changes in the arbitration and conciliation law, which aims to make settlement of contractual disputes between foreign companies and their Indian partners.
The TRAI last week, recommended a base price of Rs 2720 crore per megahertz (MHz) for 2100 MHz spectrum and repeated that the auction for the same would be along with other bands 800,900 and 1800 MHz, which are scheduled in February 2015.
The regulator kept the price for 2100 MHz band about 14 per cent lower than the price recommended for the 800 MHZ (Rs 3104 crore) band and the price is lower than 900 MHz (Rs 3004 crore), but stood higher than the base price of 1800 MHz (R 2138 crore) band.
In the budget estimate, the department of Telecom has projected a revenue receipts of R 9355 crore from the upcoming auction, which will include the sale of airwaves in the 800 MHz, 900 MHz and 1800 MHz bands.
The US markets after the Christmas holiday remained in positive terrain as of the gains in the blue chip index. But profit booking in energy stocks and thin volumes also dampened the mood. Also the weak Chinese PMI data added concerns. More activity was reduced due to the holiday on the back of New Year.
On the global front, in this week, total vehicle sales, market composite PMI, market services PMI, factory orders, Balance of trade, FOMC minutes, unemployment rate, non farm payroll data and manufacturing payrolls are the data to focus on in the US markets.
Also, this week the earnings season may kick start, where IT major INFY is to be the first on the list. Along with that HSBC India services PMI will be in focus. Crude oil is weak below $ 55 per barrel and it made 5.5 year low on amid signs of manufacturing weakness in Europe and China.
Gold is trading very close to its major support level at $ 1170, if there is a fall below this level then we can see more downside to gold and the resistance is at $ 1202 and $ 1220 per troy ounce.
Alex K Mathews is the author of Financial Services And Systems, as well as Option Trading: Bear Market Strategies published by Tata McGraw Hill. He is also the technical and derivatives research head of Geojit BNP Paribas Financial Services Ltd.
The author may have a vested interest in investments he has recommended. Feel free to e-mail him at firstname.lastname@example.org. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).