Nifty & USD/INR Report 1st June, 2012

Daily Nifty Analysis

Nifty Analysis_1.6.2012_xDirect India

The Indian markets dipped and closed in a dismal state considering poor reports from 1st quarter GDP numbers of FY13,, coupled with persistent weakness in the global markets has indeed kept the pressure on the risk appetite among investors to initiate their buying .
The losses were led mainly from the Auto ancillary, Banking,, Capital Goods and metal Stocks. The Index opened up itself on the gap
down, as negativity started looming among the local traders on the back of bloating fears of Greece’s exit from Euro Zone. Nevertheless the  bear market just happened to par its losses but only to a certain extent, as inflation numbers reported from the Euro Zone came in better than expected; however more than a catalyst run we anticipate a certain pullback was witnessed due to continuous selling being made on the Indian equity market.
For today, the market does have a potential to go  down  even  further,  considering  the persistent depreciation in the Indian Rupee
that still chokes on the investors; nevertheless with US employment data to be reported some sort of consolidation could be ascertained considering the global markets would now strategize based on the catalyst reported today.

Nifty bounced from the support levels of 4870 and closed above 4900 levels at 4924. Interim resistance is witnessed at 4970-4985 levels, where a fresh bout of selling could be expected however, if the rally persists, which may prompt by bringing new buyers where one can expect levels to test 5047 and 5085 levels.

View on Indian Rupee

USD/INR_1.6.2012_xDirect India

The US markets closed in flat; however considering the US Dollar’s persistent strength would push INR higher; however we anticipate a certain amount of pullback could be expected in the US Dollar that should preserve the pair to once again record a new all-time high.
Globally, Euro has extended its losses to mark its fresh lows in 2012 and dropped near the July 2010 lows on sustained weakness from the Spanish and Greek financial and political system. The EURUSD slipped in late trade yesterday to close more than 1% lower at 1.2365 levels, against the USD while it fell more than 1.6% against the Yen to finish at  97.70. Markets are concerned regarding the Spain’s struggle to rescue its troubled banks while additional pressure emerged after Italy sold less than its maximum target at a debt auction.

Intraday Outlook:
The Indian Rupee is expected to continue its pullback from the high of 56.50, to test its supports at 55.58 (23.60% retracement from low of 52.68 to recent high of 56.50).. Resistance at intraday high of 56.27 would be maintained and only a break should push it higher towards 56.68 (Fibonacci expansions)

Report By
xDirect India
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