Saturday, August 17, 2013

Weekly Review - 19.08.2013

Dear All,

Stock market on Friday — the biggest drop in about two years — on fears of capital controls being imposed by the Reserve Bank of India and indicators of slowing economic growth has fuelled concerns about a potential sovereign downgrade.

Fears of Downgrade :-

Besides, measures by the Reserve Bank of India (RBI) to support the currency have failed to stem the fall of the rupee, implying that interest rates may remain elevated for a longer time, the agency said. India's sovereign rating assigned by Moody's is Baa3 with a stable outlook. This is the lowest notch in the investment-grade rating.

Any further downgrade could push the sovereign ratings to a junk status.

RBI Measures to Stem Ruppe :-

The Reserve Bank of India (RBI) on Wednesday announced additional measures to support the Indian rupee by stemming foreign exchange outflows by Indian residents. On Friday, the rupee plunged to lifetime low of 62.03 before recovering to close at a record low of 61.65 against the dollar.

Overseas direct investment (ODI) by Indian companies has been cut three-fourths, 100% from 400%, making it more difficult for local corporates to buy overseas assets. RBI reduced the limit for remittances made by Resident Individuals, under the Liberalised Remittance Scheme (LRS Scheme), to $75,000 from $200,000 per financial year.

RBI data shows that even after dollar sales to the extent of $2.25 billion in June, the rupee weakened by almost 5% during the month. The sale made by RBI in June was the highest in almost one-and-a-half years.

Rumours of Capital Control :-

Meanwhile, the Government has clarified that it has no intention to impose capital controls and denied market rumours of a proposal to increase margin money on short-selling of shares.

Lets go to Technical's ...

>>> Nifty - As Updated on Last Weekly Review <<<

>>>Click the chart to see on full screen <<<

Last week wrote Nifty may bounced from 5565. Completed wave (a) near 5754.

>>> Happened and Yet to <<<

>>>Click the chart to see on full screen <<<

Now Wave (c) should start next week, with an upmove

>>> Nifty - Hourly <<<

>>>Click the chart to see on full screen <<<

>>> Bank Nifty - As Updated on 14th Aug, 2013 <<<

>>>Click the chart to see on full screen <<<

On 14th Aug updated though bank nifty looks like a break out, till facing resistance from 100dma and 10108.

>>> Happened and Yet to <<<

>>>Click the chart to see on full screen <<<

Attached is a 5 mins chart for a clear vision on how Bank Nifty should move up from here onwards.

>>> Performance <<<
>>>Click the image to see on full screen <<<