Indian markets are showing no signs of resilience and this is worrying experts. They feel that upside of markets is limited.
The weakness continued at the markets for the third straight session. The Nifty shed another 30 points to close below 6,050. The markets are showing no signs of resilience and the Nifty is in real danger of closing below 6000 before Infosys kicks off earnings season next Thursday.
The BSE 30-share Sensex was down 116.36 points or 0.57% to 20,184.74. The Sensex rose 124.75 points at the day's high of 20,425.85 in early trade. The index lost 193.93 points at the day's low of 20,107.17 in mid-afternoon trade. The S&P CNX Nifty was down 31.55 points or 0.52% at 6,048.25.
The market surged in early trade on positive global cues. The market soon pared gains. The market slipped into the red later. The market recovered from lower level after hitting a fresh intraday low in early afternoon trade. The market weakened again to fresh intraday low later. The market rebounded in mid-afternoon trade on firm European stocks.
The BSE clocked turnover Rs 3555 crore, lower than Rs 4076.03 crore on Wednesday, 5 January 2011. The market breadth, indicating the health of the market, was weak. On BSE, 1,928 shares declined while 997 shares advanced. A total of 92 shares remained unchanged. The market breadth was strong in morning trade. Among the 30-member Sensex pack, 20 declined while the rest gained.
The BSE Mid-Cap index fell 1.18%. The BSE Small-Cap index declined 1.04%. Both these indices underperformed the Sensex.
NSE's volatility index, India VIX, edged up to 18.20% from Wednesday's (5 January 2011) close of 17.88%.
Cement stocks were the big losers today with ACC and Ambuja shedding 5% apiece. India's largest oil exploration firm by sales ONGC declined 3.17% after the company's chairman RS Sharma said the company's profitability in Q3 December 2010 may be hit due to higher subsidy pay out to refiners and higher global crude oil prices.
Weakness persisted on the bourses for the third day in a row as data showing a surge in food inflation in late December 2010 rekindled fears of interest rate hike by the Reserve Bank of India (RBI). The latest data showed the food inflation accelerated to the highest level in more than a year in late December 2010. The food price index rose 18.32% and the fuel price index climbed 11.63% in the year to 25 December 2010.
Foreign institutional investors (FIIs) sold shares worth a net Rs 92.40 crore on Wednesday, 5 January 2011, as against an inflow of Rs 779.30 crore on Tuesday, 4 January 2011.
VIEWS FROM SOME BROKING HOUSES:
VIJAY BHAMBWANI of bsplindia.com said, follow-up buying has not been forthcoming and the prior resistance levels will now be supported from the way down. The first immediate supports are 6030 and then 5960 levels that he would watch out for.
JAGDISH MALKANI said the markets are mirroring the larger picture focussed on concerns like inflation, policy drifts and fast moving interest rates. He added that even though the markets saw a pullback in the last week of December, the volumes had been muted and it wasn’t exactly playing to script.
PRAKASH GABA, technical analyst and trader, Gaba Financial Advisors said “Though the market looks weak there is a good chance that it could sustain here in these regions. The market did not sustain and slackened further to close in the negative. So far no sign of strength and a level closer to 6,000 is a possibility".
“The support for the Nifty is at 6,031-6,005-5,965 and resistance at 6,100. For Sensex, the crucial support on the downside is at 20,057-19,958 and resistance at 20,500”.
FAIRWEALTH SECURITIES: “Indian market again faced selling pressure where banking, auto, and realty appeared weak along with midcap while IT sector maintained some strength. The Sensex closed at 20,184, down 116 points from its previous close, and Nifty shut shop at 6,048, down 31 points”.
“In the next session, Nifty may trade in the range 6,000-6,110. Traders are suggested to buy at dips as long as Nifty holds 6,000. IT and pharma may again attract buying; cements, fertilizer-chemical, oil-gas and reality may face more selling. Banking stocks may show a pull back from lower levels”.
SOME RECOS FROM FAIRWEALTH SECURITIES:
Sell Tata Motors below Rs 1,248 for target of Rs 1,233-1,222 and stop loss of above Rs 1,263
Buy HCL Technologies above Rs 482 for target of Rs 488-494 and stop loss of below Rs 476
Sell DLF below Rs 275 for target of Rs 269-265 and stop loss of above Rs 281
Sell Financial Technologies futures below Rs 864 for target of Rs 849-830 and stop loss of above Rs 879
Sell ICICI Bank futures below Rs 1,048 for target of Rs 1,033-1,022 and stop loss of above Rs 1,063
Buy RIL futures above Rs 1,095 for target of Rs 1,105-1,120 and stop loss of below Rs 1,085
Sell Nifty Futures below 6,065 for target of 6,035-6,015 and stop loss of above 6,085
Sell Bank Nifty Futures below 11,178 for target of 11,130-11,070 and stop loss of above 11,230
FOR TODAY: MARKET IS CLEARLY IN DOWNTREND. DON'T TRY TO CATCH A FALLING KNIFE.
Nifty future opened at 6064.75, made a high of 6072 and presently trading at 6066. probable trading range will be 6010-6080 (Nifty future). Below 6058, sell Nifty future for a target of 6035 and then 6015.
Watch for RIL, L&T and ONGC.
Nifty future opened at 6064.75, made a high of 6072 and presently trading at 6066. probable trading range will be 6010-6080 (Nifty future). Below 6058, sell Nifty future for a target of 6035 and then 6015.
Watch for RIL, L&T and ONGC.
