Pyramids on the street!

Whatever belongs to you today, belonged to someone else yesterday and it will belong to some one else tomorrow. – Lord Krishna.

Happy Janmashtami! Human pyramids will get their act together to break the dahi handi. The market too is looking to break away from its tumultuous run. Thankfully, we are likely to see a positive start as most Asian markets have recovered from a slow start. Whether any advance is sustainable given the spate of headwinds confronting the equity markets is the question.



The Nifty last week tumbled below the key psychological support of 5000 on the back of relentless sell off. The next support is said to be around 4800 levels, which corresponds to 38.2% Fibonacci retracement of the upmove that began from 2250.

The global mayhem has dampened the sentiment even as worries have grown about moderation in the domestic economy. India’s Q1 GDP report will be out on August 31. But before that we will have to contend with the F&O expiry.

The Government also has to spend a lot of time handling the corruption issue as Anna Hazare has given an open call for revolution if the Jan Lokpal Bill is not passed by August 30.

Meanwhile, the Government has reportedly set in motion back-channel negotiations. The situation is unlikely to be resolved anytime soon. One must brace for a protracted tug-of-war between Team Anna and the Centre.

All in all, volatility is likely to remain elevated for a while amid fragile global economic conditions. Only a sustained recovery in the overseas markets can lift the pall of gloom. For the time being, one should adopt a measured approach. Valuations have come off in many leading counters so it is worthwhile to make some quality purchases.

In other important news, Libyan rebel forces have seized control of much of Tripoli and taken two of Colonel Muammar Gaddafi's sons into custody. But, Gaddafi has refused to surrender in a new audio message broadcast on television.

FIIs were net sellers of Rs 9.02bn in the cash segment on Friday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net buyers at Rs 4.23bn on the same day. FIIs were net buyers at Rs 8.85bn (provisional) in the F&O segment.

Global data watch for the week: New US home sales, Germany's ZEW survey, provisional PMI data, Germany's IFO index, US durable goods orders, Gfk consumer confidence in Germany, US jobless claims, Japan inflation, US consumer sentiment and Ben Bernanke's speech.

Maruti Suzuki India is aiming higher with plans to roll out a global car by 2017.

State-owned aluminium producer NALCO plans to invest Rs 579bn by 2020 on expansion, including the setting up of two large aluminium smelters in India and abroad.

Two of India's most valuable companies- state-run Coal India and Oil and Natural Gas Corporation-have been without full-time chairmen for about six months.

Indian oil refiners will settle all oil debts to Iran by the end of this month, a business daily has reported, citing a senior oil official.

Pakistan may grant most favoured nation (MFN) status to India during a visit by that its Commerce Minister, Makhdoom Muhammad Ameen Faheen next month, according to reports.



Nifty cracks 15% in four weeks

There appears to be a crisis of confidence on every street. Global markets came tumbling down in the wake of fresh worries regarding the health of the global economy. The Indian equity markets mimicked their foreign counterparts and ended with a sharp cut this week. The Sensex and NSE Nifty shed ~4.5% each. While the Sensex just about managed to hold on to the 16000 levels closing at 16,142, the NSE Nifty shut below 4,850 levels.

The benchmark indices extended its losing streak for the fourth straight week. The Nifty has corrected ~15% in the past four weeks losing almost 860 points.

For India, the list of problems has swelled amid no sign of relief on the inflation front and the RBI persisting with its aggressive policy stance. An average monsoon, moderation in the economy, slowdown in key overseas markets and dismal progress in disinvestment has also increased the risk of higher-than-forecast fiscal deficit.

Technically, the 38.2% retracement support of the Nifty from the lows of 2008 to 2010 highs remains at 4800. So, there is a chance of a bounce back from that level. However, it would be wise to remain cautious given the gloomy outlook in the Eurozone and the US economy.

Sensex top gainers: The top gainers in the Sensex were Hero Motocorp (up 5.5%), Ambuja Cements (up 0.7%), ITC (up 0.6%) and Hindustan Unilever (up 0.2%).

Sensex losers: The top losers in the Sensex were Reliance Infra (down 11.8%), ICICI Bank (down 11.5%), Reliance Capital (down 11.4%), Tata Motors (down 11%) and Reliance Power (down 9.1%).

The BSE IT Index (down 5.3%):The top losers in the IT sector were Mphasis (down 11.8%), Mahindra Satyam (down 10.2%), Patni Computer (down 9.8%), Oracle Financial (down 9.3%) and Wipro (down 6.6%).

The BSE Healthcare Index (down 3.6%):The top losers in the Pharma space were Marksans Pharma (down 15.4%), Aurobindo Pharma (down 12.2%), Zandu Pharma (down 11.1%), Orchid Chem (down 9.3%) and Strides Arcolab (down 9.1%).

The top gainers were Astrazeneca Pharma (up 1%) and Glaxosmithkline (up 0.3%).

The BSE Banking Index (down 7.5%):The top losers in the banking space were Yes Bank (down 12%), Axis Bank (down 11.5%), ICICI Bank (down 11.5%), Karnataka Bank (down 10.9%) and Indian Overseas Bank (down 10.4%).

The BSE Auto Index (down 4%):The top losers in the auto space were Hindustan Motors (down 15.2%), Tata Motors (down 11%), Maruti Suzuki (down 7%), M&M (down 2.9%) and Ashok Leyland (down 2.5%).

The top gainers were Hero Motocorp (up 5.5%), Eicher Motors (up 0.2%) and Swaraj Mazda (up 0.1%).

The BSE Oil & Gas Index (down 3.1%):The top losers in the oil & gas space were Great Offshore (down 21.2%), Hindustan Oil (down 17.5%), Essar Oil (down 13.7%), MRPL (down 13%) and Jindal Drilling (down 8.5%).

HPCL was up 0.3% during the week.

The BSE Capital Goods Index (down 5.2%):The top losers in the Capital Goods were BEML (down 13%), Dredging Corp (down 12%), Usha Martin (down 9.4%), Jyoti Structures (down 8.9%) and Elgi Equipments (down 7.5%).

The Cement Sector: The top losers in the cement sector were Gujarat Sidhee (down 10.6%), Prism Cement (down 7.9%), Dalmia Cement (down 7.6%), India Cements (down 6%) and Kakatiya Cement (down 5%). Mangalam Cement gained 1.9% during the week.

The Telecom Sector: The top losers in the telecom space were Himachal Futuristic (down 16.3%), MTNL (down 14%), RCom (down 12.3%), TTML (down 9.1%) and WWIL (down 9.1%).

The Realty Sector (down 7.4%):The top losers in the were HDIL (down 14%), Anant Raj Indus (down 10.6%), Ansal Props (down 9.7%), Peninsula Land (down 8.9%) and Unitech (down 8.6%).

The Metals sector (down 4.3%):The top losers in the metals sector were Lloyds Metals (down 18.1%), Bhuwalka Steel (down 9.9%), Tata Metaliks (down 9.7%), Adhunik Metaliks (down 9.5%) and Jindal Steel (down 7.6%),.

The top gainers JSW Steel (up 1.5%) and Monnet Ispat (up 0.6%).