“If a business does well, the stock eventually follows” - Warren Buffet (EXAMPLE: TATA MOTORS)
It was a second day in a row that the bears took a firm control on the domestic markets. The concerns on global economic recovery and weakness across the world led the Indian bourses to close the session with heavy losses. Global sell-off put pressure on the domestic market, with big cuts in financials, metals and capital goods stocks that dragged the Nifty below the important 5450 mark.
The Sensex started the day 43 points lower at 18177. The index briefly turned positive and touched the day’s high of 18264 in the morning trades. However, from that level it started to slip on account of weak global markets. In the afternoon session, the Sensex broadened its losses as the European stocks opened lower. In the late trade, the index slumped further and touched the day’s low of 18042 as the European markets saw further weakness and US futures traded lower.
At the closing bell, the Sensex shut shop at 18070, 150 points down. The Nifty closed at 5421, 40 points lower.
BOND MARKET: India’s 10-year bonds gained on speculation that the central bank will temper the pace of rate increases after the Federal Reserve pledged to keep borrowing costs low for an extended period.
MARKET OUTLOOK: In the US, the economic data on tap includes June international trade, while the companies scheduled to report quarterly results are Macy's Inc and Cisco Systems. Remain cautious in the market as correction in the market looks imminent. Also correction in global non-ferrous metals and oil warrant further caution in the market. IIP data for the month of June 2010 is likely to set further direction of the market. According to Bloomberg Consensus, IIP is expected to be at 8.1 percent. It is expected that IIP to be at 7.9 percent. Buy Bharat Forge and Tata Motors on dips.
Reliance Industries is planning to resume the sale of treasury shares held by its Petroleum Trust. (BS)
MARKET SENTIMENT: The market breadth was negative as declining stocks outdid the advancing ones. Of the 3,059 shares traded on the BSE, 1,753 shares declined whereas 1,202 shares gained. Hundred and four shares traded unchanged.
FOR TODAY: Nifty Future, after making several attempts to break pass the 5480 mark has witnessed fresh selling pressure and seems to be testing the lower end of the trading range ie 5380 mark. It may possible that it touched even 5364 and 5349, if trading below the range 5380. All Global markets are in DEEP RED. SGX Nifty is trading at 5362.50(-42.50) indicating Nifty may open a big gap down and probably around 5364-5368. I will buy Nifty future @5344 OR 5361 only for intraday.
NOTE: I am holding RELIANCE in Cash segment and added yesterday. TRADE SAFE AND ALWAYS WITH STOPLOSS.
