Liquidity led rally :: CSEC Research

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Liquidity led rally

The S&P CNX Nifty rallied on the back of strong inflow from the FII’s and better than expected PMI number. Indian bourses absorbed heavy inflow from the FII’s to the tune of Rs. 51,143 million while DII continued to maintain their selling stance as they sold shares worth Rs 23,760 million. The midcap space extended their multiple week winning streak as the midcap index posted nearly 4 percent gains for the week, beaten down realty topped amongst the sectoral indices by posting more than 4 percent gains. On, the macro front Reserve Bank of India intimated that India sold Rs 130 billion ($2.64 billion) of bonds and set a cut off price of Rs 98.29, yielding 8.18 percent on 7.83 percent bonds maturing in 2018.

In global arena, European markets outperformed the U.S markets on account of positive news flow regarding Greece debt talks. Meanwhile, U.S. markets surged during the fag end of the week as U.S. has added 243,000 jobs last month and the unemployment rate dipped to 8.3% as nearly every sector of the economy added workers. Meanwhile, ISM manufacturing index for U.S rose to 54.1, the strongest reading for seven months. A reading above 50 implies expansion. In the Euro zone, Markit's purchasing managers' index (PMI) rose to 48.8, up from December's figure of 46.9.

Key macro data to lookout for this week are IIP numbers for the month of January and on the global front news flow from Greece regarding debt talk with private lenders will decided the trend of the market. Q3 numbers of M&M, Hindustan Unilever, GMR Infrastructure, Nalco, Bharti, Tata Steel, Hindalco are to be announced this week.

Regards,

CSEC Research