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Market Commentary
IIP and MPI data along with inflation rate will move the market next week : CapitalVia Global Research
Posted On : 2017-01-07 05:02:44( TIMEZONE : IST )
Mr. Rohit Gadia, Founder & CEO, CapitalVia Global Research Ltd.
The global equity market started the first week of the year on a positive note. Most of the Asian market moved higher after the weak data of the US economy pushed away the rate hike expectations. The possibility of a rate hike has been moved further by at least six months according to the recent minutes released by the Federal Reserve, thanks to the weak retail sales figures and an expected decline in the producer prices. The core producer prices, a leading indicator of inflation, fell in July and the market is expecting that this will refrain the FED from tightening the monetary policy further.
Domestic market moved higher following the global equity market, started the first week of the year on a positive note. Most of the Asian market moved higher after the weak data of the US economy pushed away the rate hike expectations. The possibility of a rate hike has been moved further by at least six months according to the recent minutes released by the Federal Reserve, thanks to the weak retail sales figures and an expected decline in the producer prices. The core producer prices, a leading indicator of inflation, fell in July and the market is expecting that this will refrain the FED from tightening the monetary policy further.
Nifty continued its advances further after it witnessed a strong bounce back during last week of 2016. Strong buying interest pushed the market above the key resistance of 8200, momentum started to pick up. Most of the trading session we witnessed market to rally backed by the absence of any strong selling interest, since it made a double bottom at the 7900 level.
The market gave a clear indication that the bulls were in full control of the market this week. As long as the market stays above this level of 8200, we expect the market and the momentum to stay strong going forward. We believe the low that the market posted at 7950 is a strong support zone and it is unlikely that market will move below this level anytime soon.
Market movement going forward is depend on important domestic data like Industrial Production and Manufacturing Production data, along with Inflation rate, is scheduled to be released on Thursday. Nikkei Services' PMI is going to be a key indicator. Globally, data like Crude Oil Inventories, Unemployment Claims, Fed Chair Yellen Speaks due on Thursday will be important. Along with that, the US month on month Core Retail Sales data due on Friday will be a key indicator.
