Nifty & USD/INR Report – 8th June, 2012

Daily Nifty Analysis

Nifty Analysis_08.06.2012_xDirect India

Markets continued inspiring from risen hope of policy rate cut and positive market sentiments after PM Dr. Manmohan Singh announced a big push to the infrastructure development in the country. European and Asian markets were up too over the speculation that Central Bank will respond with stimulus measures to resolve the crisis in Spanish banks. Asian markets were positive on the expectations that China will cut key policy rates to ease growth. Overall, the world equity markets witnessed a good rally. Interest sensitive sectors – banks, infra, auto, real estate etc performed well on the expectation of rate cut in the monetary policy to be announced on June 18, 2012.

The Nifty has managed to sustain & close above the 5,000-5,020 levels which are still signifying a bullish signal. The index has strong support at 5,000 levels on the downside. There is an immediate resistance at 5,060 levels on the upside and on a close above expect rise to 5,120 & 5,140 levels. Downside support of 4978 levels (low of June 7th, 2012) should be tested if bearish trend persists 4954.2 (61.8% retracement).

However considering the equity markets will take cues from the ongoing sentiments of the global indices that has diverted towards downhill after US Federal Reserve Chairman remained silent and still resilient on increasing further stimulus in the market.

View on Indian Rupee

USD/INR Analysis_08/06.2012_xDirect India

The Indian Rupee moved above the key 55 barrier late Thursday, hitting its strongest level in more than two weeks against the Greenback, better than expected bond auctions by Spain and France, healthy gains in the domestic stock markets and rate cut in China in late trade boosted revival in global risk sentiment. The home currency stepped up to 54.94 against the USD as compared to Wednesday’s close of 55.36. Earlier during the day it hit a high of 54.92, its strongest level since May 28.

Indian Rupee Intraday Outlook:

The Indian Rupee is expected to open with moderate losses on Friday as weakness in the Asian stocks after Bernanke comments appended by the drop in the EURUSD would impute a bearish sentiment while trading in the local currency.

The  resistance  at  55.25  (at  23.6% retracement) is witnessed following a breach would push it towards 55.40 and 55.72 levels. Support at 55.02 would be well kept; however if global markets would once again resume their risk appetite trends then lower end of the bullish channel would be tested in at 54.75.

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