The optimism from the previous week continued and one saw markets open very strong yesterday. Our markets saw the BSESENSEX gaining intraday 175 points, but by the end of the day we were negative and the SENSEX closed with losses of 50 points. The NSENIFTY similarly lost 14 points. The bad news was on account of a likely downgrade from Standard and Poor’s the rating agency. In the previous week the BSESENSEX gained 753.71 points or 4.72 per cent to close at 16,718.87 points. The BSEMIDCAP gained 2.86 per cent, while BSESMALLCAP gained 2.13 per cent. The top sectoral gainers last week were BSECAP, which gained 10.90 per cent, BSEBANKEX (up 7.76 per cent) and BSEAUTO (up 5.90 per cent). Amongst individual stocks, last week, the top gainer was capital goods manufacturer Larsen & Toubro with a gain of 15.33 per cent. Other gainers included Sterlite (up 10.31 per cent), Hero Moto (up 10.04 per cent) and SBI (up 7.6 per cent).
We have an action packed week ahead. Each of these events has the potential to move the markets either way by a few hundred points on the SENSEX. Today, IIP numbers for May will be declared while Thursday, June 14, inflation for May will be announced. Friday brings results of advance tax data for the first quarter of the current financial year.
Election results from Greece would be available on Sunday. Europe in particular would be reacting to the election results by the time trading comes to an end on Friday. The future of Greece, as a Euro nation would depend on these elections.
The markets seem to have discounted a 25 basis points rate cut in the forthcoming RBI Review meet to be held on Monday the 18th of June. Any changes in this expectation would see the markets reacting to the same as the week comes to and end on Friday, particularly once the advance tax numbers are known.
The BSESENSEX has support at 16,546, then at 16,263, then at 15,955 and finally at 15,748 points. It has resistance at 16,776, then at 16,944, then at 17,074 and finally at 17,255 points. The NSENIFTY has support at 5,013 points, then at 4,924, then at 4,864 and finally at 4,770 points. It has resistance at 5,103, then at 5,175, then at 5,217 and finally at 5,255 points.
Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd. Readers are invited to read more about these and other issues on his website http://ak57.in
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