Nifty & USD/INR Report- 12th July, 2012

Daily Nifty Analysis

Nifty Analysis By xDirect India

Indian equities extended intraday losses and is near day’s low as traders continued to book profits after a sharp up-move in last session and weak global cues. Brokers said reports of less than average monsoon rains this season might hamper efforts to boost economy and hurt company earnings this quarter impacted the market sentiment. The IMD said that monsoon, the life- line of Indian agriculture, has covered the entire country but rains are still deficient by 23%. Indian markets ended today`s session on a lower note on the back of weak global cues and heavy selling witnessed in auto, FMCG, realty and metal stocks.

The gap down open in the market has definitely enabled the sellers to prompt their activities considering we had yet other depressing FOMC minutes where no sign of QE was provided. This shifted the mindset of traders which now in turn are in selling activities. The immediate resistance comes in at 5290 levels followed by 5325 levels on the rising trend line (former support and now resistance). Expect selling pressure to remain at higher levels unless we have a fundamental trigger which makes the price action to close above 5320 levels, would negate the bearish bias.

View on Indian Rupee

USD/INR Analysis By xDirect India

The Indian Rupee extended losses on Monday falling to its lowest levels in almost a week led by weak cues across the Asian and European stocks markets and post the acute drop in the Euro on Friday which slipped to its two year lows below the 1.2300 level. Broad weakness in the domestic stock markets also put pressure on the local currency which finished with a loss of a percentage yesterday. It seems even though a slight positive reaction in the European currencies did not aid any boost to risk appetite neither towards appreciation to INR value. We therefore require a more of a fundamental trigger that would enable an upside in the same.

The USDINR pair seems to hold its daily Fibonacci support at 55.74 and if it continues to do so then we are looking at 55.92, 56.08 and then 56.14. However a break of intraday low which is also the support (Fibonacci) then 55.65 followed by 55.50 would be tested. We keep our bias on the upside.


Report By
xDirect India
www.xdirect.in