Time for high-risk players
Recent positive movements lure for brave investors
The markets last week remained mainly in the positive zone, on the back of FII buying and mixed economic data. On a weekly basis, the Nifty closed up at around 1.3 per cent and the Bank nifty closed up at around 5 per cent. The midcap and smallcap sectors ended at around 1.1 per cent and 2 per cent respectively. Nifty weekly charts showed a target of 6440 and the support for Nifty is at 6230 and below. It may test at 6165, 6118 and 5951 levels. So investors with high-risk appetite can buy 6400 call options.
Tata Power and Axis Bank were the top gainers on the stock's front, and closed up at around 10.6 per cent and 10.3 per cent respectively. The losers were HUL and ITC, which closed down at around 6 per cent and 3 per cent respectively. The GDP data for the quarter that ended on September 30 expanded at 4.8 per cent as compared to 4.4 per cent in the previous quarter.
The growth was accelerated on the back of higher outputs in both, industry and agriculture, and an exports revival. The agriculture sector grew 4.6 per cent as compared to 2.7 per cent in the first quarter. Electricity production increased 7.7 per cent as against 3.7 per cent, but the growth in community, social and personal services slowed down to 4.2 per cent from 9.4 per cent, in the June quarter.
The HSBC Market Purchasing Managers Index for the services industry stood at 47.2 in November, from a level of 47.1 in October. The current level, stood below the 50 mark for the fifth month, indicating a contraction. On the other side, the manufacturing activity also saw an expansion in November for the first time since July, which was driven by new domestic orders. The HSBC India Manufacturing PMI stood at 51.3 in November from 49.6 in October. The follow-on public offer of Power Grid Corporation of India (PGCIL), hit the markets on December 3, for a stake sale of 17 per cent.
The issue opened on December 3 and closed on December 5 for the institutional investors. The issue was open till December 6 for the retail category of investors and employees. The price for the issue was fixed at Rs 85 to 90 per share. 50 per cent of the net issue is allocated to qualified institutional buyers, 35 per cent for the retail category and 15 per cent to the High net worth investors and above 0.38 per cent of the issue is reserved for the employees. The retail category and employees got a discount of 5 per cent on the issue price. The government holding in the company may come down to 57.89 per cent, from the present holding of 69.42 per cent.
On the global front, the HSBC Chinese Purchasing Managers' Index (PMI) data was the first data to be announced. The Chinese manufacturing data beat analyst estimates in November, and stood at 51.4 unchanged from October and above markets expectations, for a reading of 51.1. Most global markets remained lower on concerns that the US Federal Reserve may start reducing their stimulus program, earlier than estimates, on the back of better data from the US.
The US factory data rose in November to its best showing, since April 2011. In the Japanese markets this week, the major indicators to watch out for include GDP, and current account. On the US front, initial and jobless claims as well as retail sales data, will be in focus. Industrial production data and consumer confidence data will remain important ones to watch for, in the Eurozone area.
For Indian markets, manufacturing production and industrial production data will be the major triggers. Gold is positive at above 1225. If the level is breached, then 1236 and 1245 can be tested. If it is unable to surpass 122, then 1210 and below 1202 can be tested. The Rupee is showing slightly strong movements and the target is at 61.53 and 61.24. Support for the Rupee is at 61.67 and 62.14 levels.
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 email@example.com. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
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