- Indian Stock Market Technical Outlook

Indian Stock Market Technical Outlook

Market Watch

By Ivan D. Martchev What you can't do with a little money, you can do with more money. And the policy makers have certainly done so. By my back-of-the-envelope calculation, they spent about $400 billion this summer to pull the credit market and, consequently, the stock market out of the black holes into which they were sinking.
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Indian Stock Market Technical Outlook

Monday, 30 July 2007

The daily charts of the Nifty indicate a bearish trend. The long bearish candle of 175 points was a huge loss. The Nifty unable to close above the 4,600 level.
On the downside, it has support around 4,380 and 4,315. A close above 4,585 could trigger more upsides to 4615 and 4,630 in the short term.

Indian Stock Market F&O cues:

The discount is widening with every recovery. At every recovery, we could see some shorts being taken up. But this could have only a minor impact. The discount, which had come down to about 26 points, has now gone back to 50 points even when the markets had recovered just a bit. But again it's down about 152 point for the spot. The 4,500 put also been quite active and 4,300 put has also seen some open interest buildup.

Indian Stock Market Roundup

The 30-share BSE Sensex lost 330.98 points, or 2.13%, to end at 15,234.57 last week. The Nifty lost 120.85 points to close at 4,445.20. The market edged lower due to a sharp fall in a single trading session on Friday caused by setback in Asian and US stocks. The market was firm for a better part of the week as renewed buying was witnessed due to good Q1 June 2007 results. FII inflows remained robust. A good
rollover was witnessed to the August 2007 series from the July 2007 series when the July 2007 contracts expired on Thursday.

Overall 83% positions have got rolled to August 2007 from July 2007. A good rollover of 73% was witnessed in index futures as well. Institutional investors rolled over short positions in Nifty following the hedging of their positions in the cash market.

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This week, global cues will play a major role in influencing the markets. With most June quarter results having been declared, the market will closely watch the monetary policy review of RBI due on Tuesday. The RBI is likely to keep rates steady. However, it remains to be seen whether the central bank will raise cash reserve ratio (CRR) to suck out excess liquidity in the banking system.
Data released on Friday showed India's wholesale price index rose 4.41% in the 12 months to July 14, 2007, higher than the previous week's 4.27% due to increase in food prices. Oil prices have held firm above $75 a barrel on fears of tight summer supplies would offset a fresh wave of risk aversion that struck US equities and dragged oil down a day ago.

Any sharp rise from these levels, may dampen the sentiment.
Source ICICI Direct Research

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