Nifty has closed positive (+9 points) at 5290 positive close 8th week in a row and this is highest weekly closing for Nifty after 18-Jan-2008. Nifty broke out above 5310 resistance this week but could not sustain as still it hasn’t closed above that level on any day. BSE MIDCAP and SMALLCAP indices closed higher this week outperforming Nifty/Sensex as stock-specific performance was witnessed on the back of NAV-propping by Mutual Funds. HDFC and TATA MOTORS rose more than 7% each, REALTY stocks recovered as DLF and UNITECH were one of top gainers in Nifty. TECH stocks were on receiving end this week as Rupee appreciated towards 18-month – INFOSYS -5%, HCL TECH -4%. SUGAR stocks continued to fall this week and RENUKA, SAKTHI SUGAR, BAJAJ HIND fell 5-6% each.
India's manufacturing growth slowed down in March, dropping from a 20-month-record in February, as mounting cost pressures took a toll on expansion in output, a survey showed. The HSBC Markit Purchasing Managers' Index, based on a survey of 500 companies, fell to 57.8 in March from 58.5 in February, which was the strongest since June 2008. A reading above 50 means activity is expanding. Overseas fund houses have made a net investment of over Rs 20,600 crore ($4.5 billion) in Indian stock markets during the last three months of financial year 2009-10, according to the SEBI data. FIIs poured over Rs 1,09,300 crore in Indian stock markets in 2009-10. In contrast, they had sold shares worth Rs 47,706.2 crore in 2008-09.
Sensex has formed a double top at 17790 levels and until a closing past 17800 is not seen, fresh strength would be difficult to come. Nifty has to close past 5310 on a sustained basis but stock-specific action is expected to continue as investors bet on expectations of Q4 March 2010 results. INFOSYS would be important as it starts the reporting season on 13 April 2010. Nifty falling below 5200-5170 support would be a sign for reversal in up-trend and below 5000 panic selling can be seen. Nifty may face strong resistance at 5370/5450 levels as volumes are still not supporting the up move. The forecast for the southwest monsoon for 2010 is the next major trigger for the market. Good rains this year after last year's drought will boost farm output and rural incomes. But another monsoon failure will add to inflationary pressure which in turn may hamper the current strong economic rebound.
Stocks looking good: FSL, DEEPAK FERT, TINPLATE, MRPL, DISHMAN
Supp 5230/5160/5095 Res 5328/5374/5455