The key benchmark indices edged lower in volatile trade, snapping last four days gains as profit taking emerged after indices struck a seven-week closing highs on Monday, 3 January 2011.
The market edged higher in early trade extending last four days gains on firm Asian stocks. It cut losses after reversing initial gains to hit fresh days low in morning trade. It again trimmed losses after hitting fresh intraday lows in mid-morning trade. It recovered sharply after hitting fresh intraday lows in early afternoon trade. Market turned positive in afternoon trade as select heavyweights extended gains. It held positive zone in mid-afternoon trade. It again slipped into the red in late trade.
The BSE 30-share Sensex was down 62.33 points or 0.3% to 20,498.72. The Sensex rose 90.16 points at the day's high of 20,651.21 in early trade. The index declined 112.04 points at the day's low of 20,449.01 in early afternoon trade.
The S&P CNX Nifty was down 11.25 points or 0.18% to 6,146.35. The Nifty hit high of 6,181.05 in early trade, its highest since 12 November 2010.
The market breadth, indicating the overall health of the market was marginally negative. On BSE, 1496 shares declined while 1454 shares advanced. A total of 97 shares remained unchanged. The breadth alternately moved between the positive and negative breadth earlier in the day.
From the 30 share Sensex pack 18 fell and the rest rose.
The BSe Mid-Cap index fell 0.26% and the BSE Small-Cap indices fell 0.04%. Both the indices outperformed the Sensex.
BSE clocked turnover of Rs 4318 crore higher than Rs 3447.14 crore on Monday, 3 January 2011.
Index heavyweight Reliance Industries (RIL) rose 2.12% on reports the company has commissioned international consultants AT Kearney and Booz and Co to prepare a business transformation plan for it for fiscal 2011-12.
PSU OMCs fell as the price of crude oil rose Monday to a 27-month high on speculation the United States will sustain an economic recovery this year, bolstering fuel demand in the world's biggest oil-consuming country. Higher crude oil prices will increase under-recoveries of state-run oil firms on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
Oil exploration firms rose on higher crude oil prices. The rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms. Realty stocks reversed initial gains on worries higher interest rates could dent demand for residential and commercial properties. IT stocks gained on positive economic data in the US, prime market for Indian IT firms. FMCG stocks edged higher. Some healthcares stocks too rose. Banking stocks declined on worries central bank may hike interest rate to tame inflation. Metal stocks were mixed.
Top picks for 2011 from ICICI securities::
Aurobindo Pharma, Axis Bank, Balrampur Chini, Escorts, Gail, TCS, HCL Technologies, HindZinc, L&T, Lupin, Natco Pharma, Oil India.
IIFL picks for 2011::
Largecaps: Bajaj Auto, L&T, M&M, REC, RIL, SBI, Sterlite, Tata Steel
Midcaps: Escorts, OnMobile, PetronetLNG, Unity Infra, YesBank
VIEWS FROM BROKERAGE HOUSES:
GEOJIT BNP FINANCIAL SERVICE:
“The markets will see another round of buying coming in during the Q3 result season starting from the second week of this month. From the better auto and cement sales figures, the earnings of these companies are expected to fuel the upside in the market. For the time being the market will remain in a range of 6,225 and 6,135 levels”.
INDIAN INFOLINE:
“India was among the weakest performers today (04.01.2011) even as markets in Asia and Europe continued the good work of the recent days. Among the factors acting against India at the moment are high inflation, rising interest rates, expensive valuations, lack of reforms and governance issues. Also, the external account has deteriorated in the past couple of quarters, which could be among the sour points for global investors. In the coming days and weeks, investors will focus on earnings, economic reports and the RBI action”.
BONANZA PORTFOLIO:
“The market is expected to consolidate in a range of 5,940 / 6,260. The long term trend remains up”.
ANGEL BROKING HOUSE:
“Markets opened higher but were unable to sustain the opening gains which led the indices to close in the negative territory. On the daily chart, we are witnessing consolidation of previous gains but not weakness. In coming trading session momentum on the upside could be seen only above 20,655 / 6,185 level. On the upside, then indices are likely to test 20,775-20,835/6,220-6,240 levels. On the downside, 20,405-20,323/6,105- 6,081 levels may act as supports for the day”.
CANARA BANK OF SECURITIES(CANMONEY):
“Technically, Nifty exhibited a very ranged and weak show but despite negative closing maintained the sanctity of vital support of 6,140-6,130 levels. Technically Nifty formed one bearish candle after a bullish pattern and confirmed its tiredness and traded throughout the session with good volumes. Owing to resurrecting buying in FMCG, Oil & Gas stocks apart from other sectors, Nifty exhibited a dull movement but successfully closed above its 9, 14, 50 and 100 day`s SMA level placed at 6,065, 6,026, 6,021 and 5,919 levels; these levels may act as new support, in forthcoming sessions. VIX for the day closed at lower level of 17.03% and indicating less volatility in market in the forthcoming sessions. RSI (14) for the day was at 62.77 levels and MACD was above the signal line, thus combined together they are giving the signals that market may remain sideways for some time before taking a clear direction”.
FAIRWEALTH SECURITIES:
“Indian market faced profit booking after four days of upward rally and appeared as moderate loser in indices. Banking, metals, auto, telecom appeared as major losers. Sensex closed at 20,498, down 62 points and Nifty at 6,146, down 11 points from the previous close”.
“In the next session, Nifty is expected to trade in the range 6,118-6,180. Sustaining beyond the range may decide the intraday trend. Power, energy, pharma and FMCG may attract buying while auto and real-estate may face selling pressure. Traders are suggested to trade according to the given range of Nifty”.
DAILY RECOS FROM FAIRWEALTH:
Sell BPCL below Rs 750 for target of Rs 739-722 and stop loss of above Rs 761
Sell Jet Airways below Rs 743 for target of Rs 731-722 and stop loss of above Rs 755
Buy Reliance Industries (RIL) around Rs 1,070 for target of Rs 1,088-1,100 and stop loss of below Rs 1,057
Sell HDFC Bank futures below Rs 2,338 for target of Rs 2,318-2,300 and stop loss of above Rs 2,358
Sell Bajaj Auto futures below Rs 1,429 for target of Rs 1,409-1,392 and stop loss of above Rs 1,450
Buy APIL (ALSTOM PROJECTS) futures above Rs 733 for target of Rs 744-759 and stop loss of below Rs 722
Buy Nifty Futures around 6,110 for target of 6,140-6,175 and stop loss of below 5,990
Sell Bank Nifty Futures below 11,570 for target of 11,510-11,450 and stop loss of above 11,630
FOR TODAY: SELL NIFTY FUTURE BELOW 6155 FOR A TARGET OF 6135/6115 OR BUY NIFTY FUTURE ABOVE 6180 FOR A TARGET OF 6205/6210. PUT YOUR STOPLOSS AS PER YOUR RISK TAKING APETITE.
DURING DAY TIME, WATCH IFCI/SUZLON/RIL. WILL UPDATE FOR OPTIONS.
