Nifty

#71 Nifty Update

NIFTY remained range bound today to close at 5138 down by 22%. NIFTY opened positive with bull power but then had shown some weakness. NIFTY played like a Indian Cricket team i.e., initially we had a early fall but then Dhoni and Praveen Kumar came from nowhere to give a respectable total as did Reliance to NIFTY with high of 5185. US was seen in hands of bears yesterday because of rumors of France debt getting downgrade and government could default. But later on Moody and S&P official affirmed AAA rating on France instruments on Bloomberg TV. They even mentioned that France Debt instruments remains the best investment over the world debt market even above Germany’s AAA rating. US has its own worries about economy which didnt allow bulls to have a driving seat last night.  European markets opened positive today which supported bulls in NIFTY. ECB has been buying Italian and Spain debt instruments but thats a temporary relief so you might see some downside in the market. Piramal Healthcare to buy 5.5% stake in Vodafone India with a 2 years of Investment with Availability of PUT option. Piramal aims at 15-20% return. But i really doubt his target. In such a narrow competition in telecom sector will such companies able to give best performance??.. Internal Inflation numbers was out today and Food Inflation was highest at 9.9% in last 4.5 months with High fruits price on WoW. Primary article inflation was at 12.22% against 10.99% last week. Fuel Inflation was marginally up at 12.19%. RBI has biggest challenge these days of Inflation and on other hand instability of financial markets. Will they pause the rate cycle??? In my opinion Inflation would be in control because we will have good monsoon and prices of commodities will ease. Secondly crude is trading a way lower which will have effect on final fuel price and ease them. So i think that inflation will be under control in Second Quarter. China’s monthly export figures were out yesterday and they posted 20% growth which is highest in this year which is a good sign for their economy. Technically speaking Indicators are still hovering around oversold zone. Market seems to be range bound between 5076-5232. Breakout on either side will decide the further trend. Hold your positions if you are short on NIFTY….
NIFTY levels for 12th August:-
R-5168                  S-5125
R-5230                  S-5082
R-5280                  S-5050
R-5334                  S-4985

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