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In the week passed by, markets started on subdued note as participants remained cautious ahead of the US president Donald Trump’s speech to a joint session of Congress, there were no negative in the President Donald Trump speech. However, sentiment boosted as the quarterly GDP numbers surprised the market. The GDP for the quarter October- December came in at 7% Vs 7.4% (QoQ). Though there is a slight slowdown, but the market participant were expecting GDP to dip to 6.1% due to demonetisation. Meanwhile, Nikkei India Manufacturing Purchasing Managers’ Index (PMI) inched up to 50.70 in February from 50.40 in January, while Nikkei India Services PMI stood at 50.30 in February, up from 48.70 registered in January. This led to Nifty testing levels of 8892.50 mid-week. However, the level of 9000 was so near yet so far. Finally, the market took a pause after a five weeklong rally and ended the week with losses of about half a percent. In the backyard few important events are lined up in the coming week which is likely to keep market on the tenterhook. The State Election verdict which is due on 11th March. On the economy front, Index of industrial production data for the month of January will be announced on Mar 10. Also, ONGC is all set to take over complete control of HPCL from the government and forward integrate its operations.

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Indian market began the week with Trump’s bombardment this time on Pharmaceuticals stocks which led to gap down opening, but by the end of the day market recovered from the early morning sell-off. However, market remained nervous ahead of the budget and ended the second session of the week with losses. As Finance Mr. Arun Jaitely started the Budget speech market traded in a narrow range with negative bias, however, by the end market participants realised there has been no changes in the Long Term Capital Gains (LTCG), which kept market participants on tenterhook. ‘No bad news is good news’ is what sums up for stock market from Union Budget 2017. This triggered rally and bulls ended the week with gains of 1.28% and Nifty reclaiming 8,700 mark. Going forward, the first RBI policy meet post the Union Budget on 8th February,2017, will be a major event for the market to watch out for.

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The market edged higher last week, backed by positive global cues. The Sensex crossed the psychologically important 27,000 level. Last week , the Sensex rose 478.83 points or 1.79% to settle at 27,238.06. The Nifty rose 156.55 points or 1.90% to settle at 8,400.35. The BSE Mid-Cap index gained 317.31 points or 2.58% to settle at 12,639.03. The BSE Small-Cap index 249.52 points or 2.01% to settle at 12,689.85. India's industrial production surged at 13-months high pace of 5.7% in November 2016 over November 2015, snapping 1.8% fall recorded in October 2016. The manufacturing sector's production jumped 5.5%, while mining output rebounded 3.9% after three months of decline, contributing to the increase in industrial production. The data was released by the government on Thursday, 12 January 2017. The all-India monthly inflation based on the consumer price index (CPI) dipped to 25-months low of 3.41% in December 2016, compared with 3.63% in November 2016.

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Indian market began the first week of New Year on a muted note and shifted into consolidation for the first couple of trading sessions but later gained traction by the close of the week on expectation of normalcy returning in the economy post the demonetization move. One interesting move which brought cheer to the markets was that Banks reduced interest rates by as much as 0.9% across categories. SBI and HDFC Bank have taken the lead and others are following as well. The auto number which came in was not good largely due to impact of demonetization. Although the monthly sales in December 2016 saw a dip, the year-on-year impact varies from automaker to automaker. Tata Motors came in with a big surprise as it posted 30% rise in US sales for the month of December and 24% rise in annual US Sales.

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Nifty close 8831 points: The Nifty opened flat but rallied to a high of 8893 points on Thursday (as the FED left rates unchanged) before selling off on the last day of the week. This resulted in the Nifty gaining a meagre 52 points (0.59%) last week primarily because of some heavyweights like HDFC Bank, HDFC Ltd, Reliance etc. The Reliance group stocks were in the limelight. The weekly trendline support (connecting the lows of 6825-7927 points) has moved up to roughly 8800 points, for this week. This should be an absolute Stop Loss on longs from at least a short term trading perspective. A breach in weekly close of this level could see the Nifty slide to the next crucial support of 8688 points which also if broken could see it test the 8517-8543 points range.

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We are now nearing overbought territory in the short term hence one should be cautious at higher levels from here on. For the day the support is pegged at 7904 points and further down in the 7851-7861 points range

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Immediate support for the index is placed around levels of 8200-8180 as indicated by 61.8% retracement and the 200-day EMA and if in any case this support is breached it’s likely to move toward levels of 8065. In that case 8065 would act as a major support and if this level is breached that further weakness in the market cannot be ruled out. On the higher side the level of 8350 will act as a hurdle for the bulls and the major hurdle for the bulls would be around levels of 8420.

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