WEEKLY Update 8th – 12th March

Here we bring you the weekly overview of the Indian as well as of the Global economy and latest global business and industry updates.

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Markets continued to build on the gains that came in the post budget week. Investors seem to have overcome the worry factors like domestic fiscal deficit & concerns over Euro Zone.

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Even the sudden burst of buying by the foreign institutional investors reflects the confidence  in the domestic economy. Food price index rose 17.87% in the 12 months to 20 February 2010, faster than the annual rise of 17.58% in the previous week but is expected to come down on the likelihood of good harvest going ahead.

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On the external economy front, India’s imports posted a strong growth for the second month running in January, signaling a pickup in domestic demand and investment. Non-oil imports registered a growth of 28.8% in January, while oil imports were up 56% from the year ago period.

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Exports jumped for a third  straight month in January, rising 11.5 per cent from a year earlier as demand  picked up in the United States and other major overseas markets.

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The data cheered the markets & eased some concerns over the optimistic economic growth outlook that came after the third quarter GDP numbers showing growth of 6%. In the nine months to December Indian economy has expanded by 6.7% & in order to meet the CSO expected growth of 7.2% in the current fiscal, it should grow by 8.8% in the last quarter ending March 2010.

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Going forward markets are expected to trade in line with the global markets & will keep a close eye on the IIP numbers that are scheduled to be announced in the coming week. However markets may face liquidity pressure with approximately 22,000 crore going out from the banking system last week & another 12,000 crore expected to go out by the week ending 13th march as a result of hike in Cash reserve ratio by 75 bps by RBI.

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Another liquidity squeeze would be from the corporate in the system as the last tranche of Advance tax is approaching i.e. 15th March. Above all the expected rush of new & follow on public offering in the near term is expected to put a continuous pressure on the liquidity front.

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The week gone by saw one of the strongest rallies in stock markets across the world which goes to show that bulls are still strong and a lot of money lying in the sidelines enters the market at every fall. Trend of Nifty and Sensex is bullish and Nifty has support between 5030-4950 and Sensex between 16700- 16400 levels. The dollar index is finding a strong resistance between 80-81 levels and if it does not cross this strongly then the rally is expected to continue.

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Commodities rose on benefits of doubt as dollar index is witnessing see saw movements amid some improvement in economic releases. However, there is still some uneasiness, regarding the health of European countries, including Spain. In metals and energy, things look balanced right now. These commodities are expected to trade in a range.

Story of agro commodities is little different.

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Despite fragile outlook, most of commodities prices soared on support at lower level buying and domestic as well as overseas demand.

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Cautious trading is advisable here, especially in spices as they have already witnessed significant upside in last few trading sessions.

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Stay Tuned for More updates

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

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