ICICI Direct Weekly Equity Pulse

Previous Week

The Indian market after the 14th straight week of gain has closed the week ended June 19, 2009 with a loss of almost 6% on week-on-week basis. The benchmark indices closed in the red in three out of five trading sessions. On a week-on-week basis, the BSE Sensex closed 716 points lower to close at 14521.89. The S&P CNX Nifty ended at 4313.60, lower by about 269 points.FII inflow in June 2009 totalled Rs 4,962.40 crore (till June 17, 2009) with their inflow in calendar year 2009 at Rs 26,281.80 crore.

Week Ahead

Volatility may rise in the coming week as derivatives contracts for the June 2009 series expire on Thursday, June 25, 2009. The National Stock Exchange (NSE) will adopt the free-float market capitalisation method to calculate its benchmark indices from June 26, 2009 instead of the existing full-float method. Hence, it can result in volatility. Weights of public sector undertakings – ONGC, NTPC, SAIL, PowerGrid Corporation and National Aluminium Co will come down by at least 50% with the index going free float. The market will keep a close watch on the data that would be released in the coming week such as the US existing and new home sales data, US GDP QoQ (Annualised) and US initial jobless claims. This data may decide the trend of the market in the coming week.

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