In the negative zone

On the back of weak economic data and global cues the markets last week remained mainly in the negative zone But the FIIs buying on the other side provided a strong support On a weekly basis the Nifty closed down at around 15 per cent and Bank Nifty closed down at around 3 per cent The midcap and smallcap sectors ended down at around 22 per cent and 15 per cent respectively On the stocks front the losers were Union Bank and Yes Bank which closed down at around 66 per cent each The gainers on the other hand were Wipro and Sesa Sterlite which ended up at around 5 per cent each Nifty outlook turned out to be slightly negative especially below 6200 and it is likely to go down below 6000 in the near term Report According to a World Bank Group arm the Foreign Direct Investment FDI flows received by India in the JanuaryMarch 2013 period shows a rebound in inflows The report cites that the reason behind this was due to new investment policies placed for selected sectors like telecom and insurance According to the Multilateral Investment Guarantee Agencyrsquos report India is by far the largest recipient of FDI in South Asia which comprises of India Pakistan and Bangladesh According to Reserve Bank of India RBI data India saw higher FDI inflows of 45 billion in the JanuaryMarch period 2013 against 14 billion a year ago On the back of imports hitting the lowest level in more than two and a half years Indiarsquos trade deficit narrowed in November Merchandise exports rose by 586 per cent to 246 billion in the month under review on a yearonyear basis On the other side imports fell by 1637 per cent on a yearly basis to 3383 billion Gold and silver imports dropped to 8049 per cent to 105 in November compared to a year ago period Gold purchases were seen a reduction after the government took steps to curb imports like imposing a 10 per cent import duty and requiring that 20 per cent of the imports are to be reimported Prices Higher vegetable prices pushed retail inflation to a ninemonth high of 1124 per cent in November as compared to 1017 per cent in the previous month The vegetable prices rose to 616 per cent in November as compared to the same period a year ago and against 4567 per cent increase in the previous month Fruit prices rose by 15 per cent Inflation in the food and beverages segment was 1472 per cent as compared with 1256 per cent in the previous month The data shows that the provisional inflation rates for rural and urban areas for the month under review were at 1174 per cent and 105 per cent respectively The doubledigit data has fuelled speculations that the Reserve Bank may hike its rates in the coming monetary review World Starting last week the US markets were up on the betterthanexpected jobs data The jobless rate fell to a fiveyear low of 70 per cent in November Also the Chinese exports data was supporting But coming to the end of last week the US markets turned direction on concerns about an imminent reduction of stimulus by the Federal Reserve All other markets were simply following the US markets The investors are now waiting for the Federal Reserversquos decision on its bond buying programme in this weekrsquos monetary policy Nation For the Indian markets the Wholesale Price Index WPIbased inflation will be the major data to be focused Also the RBIrsquos monetary policy meet on December 18 will be another trigger Gold outlook is negative but getting support at around 1192 levels and facing resistance at 1238 Early stimulus withdrawal in the US is a major concern for the markets Major counters like ICICI Bank TATA Motors LampT and Bank of Baroda etc are looking extremely weak If Nifty falls below 6100 then we can expect more intensified selloff at these counters 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 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