Dec 17, 2012

Market Update 17/12/2012

The markets were in consolidation mode over the previous week with the Nifty not able to break out of 5965. The good news is that there seems to be support around 5840. 5800 is an important technical support currently and, if breached, we could see a reversal of the uptrend.

The momentum indicators are in the middle zone implying that the market is undecided on its direction for the short term. The moving averages and other long term indicators suggest a continuation of the uptrend.

Moving on to fundamentals, the Govt's win on FDI in retail is seen as a positive.Bharti Infratel's IPO and NMDC's FPO were moderately successful. There is increased risk appetite in the markets and that augurs well for the near to medium term.  

Globally there still is some concern regarding the US fiscal 'cliff'. This could keep global markets range bound for the near term.

For currencies it will be difficult to predict how the market will react in the near term. The Rupee has found support at 54 to the dollar. But, with the looming 'cliff', we could see the dollar appreciate as investors flee to safer treasury's and bills. However, if FII inflow continues to pour in then the rupee could appreciate. It should play in the 54-55 range. 

Industrial production has inched higher and inflation has moderated leading to speculation that the RBI has room to lower rates. However, debt yields have not moved much in anticipation of the same.

Gold has remained steady. Not much movement on either side. In the international markets it's found support at $ 1700/oz. Should move in local markets in line with the dollar.

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