Indices will take cues from overseas markets next week, with all eyes on US Federal Reserve Chairman Ben Breanne’s speech today at Jackson Hole, but the bias may be negative. Opinion is divided about whether Breanne will announce a third round of quantitative easing, but expectations have been running low in the run-up to the event. CLSA Asia-Pacific Markets, on Wednesday, said the Indian market has partly priced in hopes of stimulus measures from the US central bank.
Today, the National Stock Exchange's 50-share Nifty ended at 5258.50, down 56.55 points or 1.1% from Thursday. The BSE's 30-stock Sensex closed at 17380.75, down 160.89 points or 0.9%. Intraday, indices briefly came off lows as data showed India's gross domestic product grew 5.5% in Apr-Jun. Though this was a bit above consensus estimates, it was nearly flat from 5.3% growth in Jan-Mar, and significantly lower than the 8.0% growth recorded last year.
While this may be an upside surprise in GDP, the number remains quite weak overall...While the RBI (Reserve Bank of India) concerns on inflation are valid, we feel that given expectations of markedly sub-par growth in this fiscal year..., some softening in core inflationary pressures over the next six months may force the RBI to take measures to revive economic growth. This view is reinforced by the near-zero fiscal spending headroom and hesitant government policy initiatives. We maintain our expectation of another 100bp of repo rate cuts in FY12-13.
We expect see 5200 as a strong support for the Nifty and 5350 as an immediate resistance. Next week, shares of automobile companies will take cues from August sales numbers, due over the weekend. Stocks of mining and steel companies will be in focus also as the Supreme Court will Monday pronounce its order on the question of resumption of mining in Karnataka.
(www.rupeedesk.in)
Today, the National Stock Exchange's 50-share Nifty ended at 5258.50, down 56.55 points or 1.1% from Thursday. The BSE's 30-stock Sensex closed at 17380.75, down 160.89 points or 0.9%. Intraday, indices briefly came off lows as data showed India's gross domestic product grew 5.5% in Apr-Jun. Though this was a bit above consensus estimates, it was nearly flat from 5.3% growth in Jan-Mar, and significantly lower than the 8.0% growth recorded last year.
While this may be an upside surprise in GDP, the number remains quite weak overall...While the RBI (Reserve Bank of India) concerns on inflation are valid, we feel that given expectations of markedly sub-par growth in this fiscal year..., some softening in core inflationary pressures over the next six months may force the RBI to take measures to revive economic growth. This view is reinforced by the near-zero fiscal spending headroom and hesitant government policy initiatives. We maintain our expectation of another 100bp of repo rate cuts in FY12-13.
We expect see 5200 as a strong support for the Nifty and 5350 as an immediate resistance. Next week, shares of automobile companies will take cues from August sales numbers, due over the weekend. Stocks of mining and steel companies will be in focus also as the Supreme Court will Monday pronounce its order on the question of resumption of mining in Karnataka.
(www.rupeedesk.in)
