Falling trend

Mar 23, 2015, 08:14 IST | Alex K Mathews

Negatives are causing a dip in the Sensex and Nifty

The markets last week remained in the negative zone tracking the global cues of profit booking. The foreign institutional investors were seen turning between buying and selling.

Finance Minister Arun Jaitley with MoS Finance, Jayant Sinha and RBI Governor Raghuram Rajan at the 550th Central Board Meeting of RBI. Pic/PTI
Finance Minister Arun Jaitley with MoS Finance, Jayant Sinha and RBI Governor Raghuram Rajan at the 550th Central Board Meeting of RBI. Pic/PTI

Nifty is witnessing technical correction and during this period we can expect a level of 8514 (100 Day Moving Average) or 8511 and 8500 levels. The major hurdle for the market lies at 8704 (50 Day Moving Average). Investors can buy one lot 8550 call options and can sell 8750 two lots of call options, when spot Nifty comes very close to the 8500 level.

Despite the rise in food prices, the wholesale inflation dipped more on account of the fall in oil prices. WPI declined for a fourth consecutive month to -2.06 per cent in February against -0.39 per cent in the previous month. According to data from the commerce ministry, food prices rose 7.74 per cent whereas fuel and power prices fell 14.72 per cent in the month under review.

FDI inflow
FDI to the country for January showed the highest inflow in the last 29 months at $ 4.48 billion. In the same period last year, inflows was at $ 2.18 billion whereas in September 2012 the country attracted and investment worth $ 4.67 billion.

According to the data from the Department of Industrial Policy and Promotion, in the April-January period of the current fiscal, the foreign inflows grown by 36 per cent on year on year basis to $ 25.52 billion and the data was at $ 18.74 billion in the same period last year. Telecom received the maximum FDI of $ 2.83 billion in the 10 month period, which was followed by services ($ 2.64 billion) and automobiles ($ 2.04 billion).

The government is planning to start its disinvestment in the coming fiscal starting with 5 per cent stake sale of BHEL in April where it aims at Rs 41,000 crore through such minority stake sales in 2015-16.

RBI figures
According to the RBI data, India’s service exports rose by 2.3 per cent to $ 14.3 in January 2015 from a year ago period.

The data on the same period last year stood at $ 13.93 billion. The imports of services during the month under review increased by 7.2 per cent to $ 7.79 billion as compared to $ 6.27 billion in a year ago period. During the period of April-January 2014-15, the data stood at $ 132.36 billion while the imports for the same period were at $ 75.79 billion.

The service export in FY 2013-14 stood at 167.01 billion and imports were at $ 88.19 billion. On account of the rising dollar and concerns of corporate earnings, US markets sank. For last week, the major trigger was the two day meeting of Federal Reserve. But the lower level buying caused a rebound.

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 alex@geojit.com. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange.

Go to top