RBI raises the bar

The Indian markets were seen trading lower due to profit booking on the back of geopolitical tensions The Nifty on Friday closed at 7568 down around 070 per cent on a weekly basis The daily charts and weekly technical charts are indicating that the weakness will continue and there are possibilities that Nifty may even test 7452 in the near term Nifty has resistance at 7598 and 7630Policy boostThe Reserve Bank of India RBI in the last week came out with its policy where the central bank kept its key rates unchanged as widely anticipated The RBI in its policy meet left the repo rate unchanged at 8 per cent and the reverse repo got adjusted at 7 per cent The CRR was also left unchangedThe central bank lowered the banksrsquo minimum bond holding requirements which is known as SLR by 50 basis points to 22 per cent effective from August 9 RBI has also lowered the Held to Maturity HTM to 24 per cent RBI retained its economic growth forecast of 55 per cent for 201415 and also stressed that the next goal is to bring down inflation to 6 per cent by January 2016Sintex Industries last week came out with its earnings where the standalone net profit rose 24 per cent On standalone basis the net profit increased to Rs 51 crore for the quarter that ended June 2014 against Rs 41 crore in the same period last year The net sales were at Rs 761 crore from Rs 615 crore last yearNet profitsOn consolidated basis the net profit for the same period stood at Rs 62 crore from Rs 47 crore in the same quarter last year The net sales increased to Rs 1341 crore from Rs 1124 crore last year The company informed that the infra segment and textile business saw a growth of 84 per cent and 39 per cent respectively in the period under reviewAs of better realisations across the business segments Tata chemicals reported more than a double in consolidate net profit For the quarter that ended June 2014 the net profit stood at Rs 176 crore against Rs 75 crore in the previous year Sales were also up 16 per cent to R 3889 crore against Rs 3331 crore The company reported Rs 4326 crore as other operating income for the reporting quarter against Rs 1986 crore a year ago The fertilizer business and nonsubsidized agri input segment grew 43 per cent and 28 per cent respectivelyDomestic passenger car sales for July rose 504 per cent to 1 37873 units from 1 31257 units in the same period last year According to the data released from Society of Indian Automobile Manufacturers SIAM the motor cycle sales in the period under consideration grew 617 per cent to 859290 units from 809386 units in the corresponding period of 2013 The total two wheelers sales in July grew 1373 per cent to 12 87462 units from 11 32066 units in the same period last yearWorld happeningsOn the global front sell offs were witnessed as majority of the global markets were trading near below their 200 day moving averages Also the geopolitical tensions added to worries The US president authorised air strikes against Iraq and the imposition of sanctions against Russia were the geo political tensions Last Thursday the ECB held its borrowing rates at record levelsDue to geopolitical tensions demand for gold has increased and it is likely to test 1322 and thereafter minor corrections are expected but outlook is positive for the yellow metal After correction it can even test 1340 Gold has support at 1305 and 1301 per troy ounceReliance Industries LampT BPCL Tata Steel Tata Motor and Asian Paints are weak and if the Nifty falls below 7550 levels these stocks can decline more than other Nifty stocks Corporate earnings will remain a major trigger for Indian markets for this week also On the economic data front Balance of Trade IIP data Inflation and Manufacturing Production data are the major onesAlex 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