Monsoon merry

Despite global cues the Indian markets were up in the week as of mixed economic data Also the low level buying after a sell off and the easing concerns of the monsoon supported the markets Now the court decision on the MAT issue which may come out today may influence market movementsNifty has resistance at 8251 above this level it could test 8301 and 8355 200DMA Support for the Nifty lies at 8176 and 8100 and a decisive move below this can cause further selloff Investors can buy Nifty 8250 call options and can sell 8350 call option one lot each The other strategy would be buying 8200 call option and put option together in the June seriesInvestmentAs the government was taking steps to attract more investment the FDI inflows to the services sector grew over 46 per cent in 201415 According to the data by the Department of Industrial Policy and Promotion DIPP the services sector FDI stood at USD 325 billion as compared to USD 222 billion in 201314The services sector which includes banking insurance outsourcing RampD courier and technology testing the FDI level stood at USD 483 billion in 201213 The overall foreign inflows to the country have also jumped by 27 per cent to USD 3093 billion during the previous fiscal as compared to USD 2429 billion in 2013 14Following the services sector telecommunications USD 289 billion automobiles USD 257 billion and computer software and hardware USD 220 billion had highest FDI inflows The consumer based index inflation rose up slightly to 501 per cent in May from 487 per cent in April 2015 The rise in the overall CPI inflation was due to the increase in inflation for transportation and communicationThe core inflation was at 44 per cent from 4 per cent in April 2015 rising for the second straight month The corresponding provisional inflation rate for the rural areas was 55 per cent and urban was at 44 per cent as compared to 53 per cent and 44 per cent last month But inflation of food and beverages group declined to 51 per cent from 54 per cent last monthShrinkingThe countryrsquos trade deficit fell to a threemonth low in May helped by lower gold imports According to the trade ministry the data shrank to 1041 billion in the previous month from 1099 billion in April The overall imports fell 1652 per cent to 3275 billion from a year earlier whereas the exports also contracted 2019 per cent on a yearonyear basis to 2235 billion in MayThe gold imports were down 23 per cent from April to 24 billion last month According to a study Indiarsquos manufacturing sector growth declined in June both monthly and on a yearly basis on the back of declining exports and disappointing corporate earnings The yearly SBI composite Index which is an indicator for manufacturing activity fell to 532 from 565 in May 2015The monthly index was also down to 467 in June 2015 from 537 in the previous month An index value less than 42 shows large decline while value of 42 to 46 means a moderate decline 46 to 50 a low decline where 50 to 52 a low growth and 52 to 55 a moderate growth The index value above 55 shows a high level of growthGreeceOn the global front the major event was Greece and its talk with creditors In its meeting the IMF walked out of the meeting whereas the talks with its creditors also collapsed After that investors were also focusing on the two day meeting of the US Federal Reserve to get more indication on its interest rate hike In its policy meet the US central bank left its interest rates unchanged at zeroThe FED said that the country is showing gradual improvement which may lead to an interest rate hike later in the year The economic data was also mixed But the Chinese shares saw a sell of as the market regulator tightened some rules for margin tradingFor Japanese markets manufacturing PMI flash inflation core inflation unemployment rate and Bank of Japanrsquos monetary policy meeting minutes will be in focus In China the HSBC manufacturing PMI flash will be the major oneAlex 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