The Industrial Production for the month of May 2011 grew by 5.6% slower than expected, the analyst were expecting a growth rate between 8% to 8.5%. The IIP growth for the period April-May was recorded 5.7% which was 10.8% for the same period last year. The Industrial Output for fiscal year April-March 2011 was 7.8% slower than the growth of 10.5% recorded in last fiscal. The IIP data today depicts a slow down in the manufacturing activity, on the backdrop of monetary tightening by the RBI to control Inflation.
Infosys Ltd. announced its Q1 FY2012 results this week (12 July 2012). The company’s top line increased 20.8% y-o-y to 7,485Crs while its bottom line rose 15.7% to 1,722Crs during the quarter compared with 1,488Crs in Q1 FY2011. On a sequential basis INFY reported a 3.2% q-o-q expansion in revenues while its net profits declined 5.3% sequentially.
The Nikkei suffered its biggest fall in the last month, slipped to below the level of 10,000, following a slump in financial stocks as worries about Europe's debt crisis. Selling of financial stocks were targeted because of concerns about the outlook for Italian banks after the cost of ensuring the country's debt jumped to the highest rate since the Euro was launched. The sector also fell following the similar stocks on Wall Street.
Inflation continued to be on the higher levels. Inflation for the month of June rose to 9.44% up from 9.06% in May. The inflation can be higher than that as the higher diesel prices are still not yet captured.
Silver have done a smart recovery in the commodities market. Silver bounced back from the low of Rs.50000 to make a high almost 58000. Punters betting heavily on the previous metals like Gold and Silver.
Equities market corrected in line with the international market. Debt pressure on the European countries triggered panic selling in the Indian markets also. But Nifty took support at its 50DMA and bounced back.
Sensex and Nifty corrected nearly 1.5%. Midcap Index closed down 0.7%. IT Index corrected the most 5.6%. Metals closed down 2.3%, Auto index 1.2%, Reality 1.8%, Bank Nifty closed down by 4.5%. Oil & gas gained 1.3%.
Amongst the stocs, Post Infosys results collapsed nearly 8.2%. JP ass lost 4%, Hero Honda 3.8%, Sail 4.1%, Hindalco 6.1%. In the gainers list PFC gained 3.69%, Dr.Reddy was up 4%, Spice Jet gained 14%, Supreme Ind 13%, Bajaj Fin 12%, Alstom 8%, Mpsteel 31%, Ocl Iron and Steel 18%, Ril ind close higher after a gain of 2%, Kotak 1.5%, Sesagoa 3%, Aanat raj Ind 11.50%, Dlf 3.2%. on the other hand Jagran Prakashan closed down 7.3%, Mundra life lost 38%.
In the chart we can clearly see that in the last week, Nifty took support at its 61.8% retracement levels at 5650 and then with the start of the week started its down ward movement with a gap down. From the high of 5740 made in the last week, nifty coutinue to fall to make a low of 5495. With FII’s flow on the positive side markets managed to be afloat. Nifty for the week closed at 5581 while Sensex closed at 18562 levels.
As mentioned in last week also the markets are heavy and we may continue to feel the pressure. Equity markets closed down nearly1.5% from its previous close. Nifty is finding it difficult to close above the 5600 levels. Few closes above the same can take the nifty to higher levels, but till that time the Nifty will fell the selling pressure. As I mentioned in my earlier article also that there was no change in the fundamentals of the India, then why did the markets bounced back from the low of 5200-5700 levels so fast. The reason was just FII’s inflow which triggered the buying streak.
Investors should wait for some more time to invest in the Indian markets till the time there is not stability. Stock specific movement will always be there.
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