It was high and buy time

The domestic markets in the last week reached new highs thanks to continuous buying in almost all sectors But a higher level was also seen in the markets Nifty on Friday closed at 8086 up around 16 per cent on a weekly basis In the coming days we can expect to see the Nifty trading in a range of 81708250 levels on the higher side and 8000 as its key support levelsFast growthThe GDP data rose to its fastest pace in more than two years in the April June quarter beating the street estimates According to the central statistics office the countryrsquos GDP rose to 57 per cent for the first quarter of 201415 up from 46 per cent rise shown in the previous quarterAccording to the data the manufacturing sector data recorded a growth of 35 per cent in the period under review as compared to a contraction of 12 per cent in the same period last year and the mining sector also showed a growth of 21 per cent against a decline of 39 per cent in a year ago periodThe construction sector expanded 48 per cent in the first quarter of the current fiscal against 11 per cent growth in the corresponding period last year On the back of rise in the food items prices the retail inflation for the industrial workers rose to 723 per cent in July as compared to 649 per cent in the previous monthThe data was below the previous years figure of 1085 per cent for the same period The food inflation stood at 811 per cent in July against 588 per cent in June and against 1410 per cent in the same month last yearBanking and businessFor helping domestic businesses the RBI has relaxed norms for external borrowings in the last week The central bank allowed recognised non resident External Commercial Borrowings ECB lenders to extend loans in Indian rupeesThe RBI said that the lenders should mobilise rupees through swaps with a bank in India and also the ECB contract should follow all the conditions applicable to the automatic and approval routes as in case the overall cost of ECB should be in proposition with current market conditions The HSBCMarkit purchasing managers index for services sector which came out in the week stood at 506 in August as compared to 522 in July indicating a slowdown in the sector activityA reading above 50 shows a sector expansion while a reading below indicates contraction of output For August the Indian services firms registered a fourth consecutive monthly rise in new orders but the pace of expansion slowed from the previous monthOn the global front the US economic data were supporting but the sell off seen in the energy stocks due to the fall in crude oil prices kept the markets away from more highs The US factory activity rose to its highest level in nearly three and a half years in August and construction spending rebounded in JulyThe other main triggers for the last week were the central bank from Europe and Japan The ECB in its meeting unexpectedly cut the ultra low interest rates and the Bank of Japan said it would keep in place its aggressive monetary easing measures designed to fight deflationOily mattersCrude oil is still weak below 9975 and is likely to test 92 in the near term and may even fall below this crucial support level Higher production lower demand and strong dollar are the key reasons for the price decline In the last week we saw IT stocks picking up their lost momentum and the trend is improving so it is prudent to create fresh long positions in the front line IT stocksInvestors can buy one lot of 8050 call option and can sell two lots of 8200 calls at the same expiry Aggressive traders can buy 8000 put options and 8100 call options together In this week for the Indian markets major data to watch out are Inflation data Industrial production and manufacturing dataAlex 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 email him at alexgeojitcom Geojit BNP Paribas has membership in and is listed on the National Stock Exchange NSE and the Bombay Stock Exchange BSE