Weak IIP nos, Dissappointing Infosys Q4 results & Poor response to Spainish & Italian Bond Auction has led to broad based selling pressure amidst high volumes & did not allow the index to sustain at higher levels.
Key indices Nifty & Sensex declined by 2% while Mid-Cap & Small cap stocks lost 2.8% & 0.6% respectively.
FMCG & healthcare index proved to be contrarian bets as they managed to stay in green with gains of 3.5% & 1.3% respectively. Sectors which contributed to the decline are Capital Goods (-4.2%), Power (2.7%). Metal (-4%) & Oil & Gas (-2%).
Weaker than expected Feb IIP data as well as Jan IIP data being revised downward to 1% from 6.8% announced a month ago has built in a strong case for a 25 bps rate cut in the forthcoming RBI policy review. No Rate cut or any cut above the quantum of 25 BPS may not be favoured by markets as minimum 25 BPS is essential for the liquidity striven industry whereas a cut above 25 BPS may affect the RBI's strategies to combat Inflation which may be feared to sky-rocket post Fuel price hike if any.
Disappointing Infosys Results owing to lower than expected guidance for Q1 & FY13 shook the entire sector as shares of Infosys plunging over 10%.
Fresh Concerns arose on the Euro-Zone front with Italy & Spain getting poor response for their Bond Auction & on rumours of Germany exiting the Euro Zone.
Even Chinese GDP data which were announced during the week were subdued & added to the pressure on Global Markets.
Slowing Economic Growth in India, rising Inflationary pressure, increasing Oil import burden & widening current account deficit caused the rupee to drift to a nearly 3 month low.
Key events scheduled next week are Inflation nos to be announced on Monday as well as RBI Monetary policy review on Tuesday which along with Q4 earnings are the next major near term triggers.
Breadth of the market remained negative amidst higher volumes & while FII's & DII's continued to remain net sellers during the week.
PCR-OI has decreased from 1.21 to 1.09 levels with huge additions in 5200 to 5400 Calls & even 4900 puts witnessing huge activity.
There has been an increase in OI in Nifty Futures in falling market with heavy volumes which indicates the weakness prevailing on the bourses.
Technically, Nifty Futures are forming lower Top & Lower bottoms. Distribution patterns are witnessed at all higher levels with all pullbacks being embraced with huge selling pressure on all rises.
Post basket selling on Friday leading the index to plummet over 100 Nifty points in a matter of 15 minutes,
Now Nifty Futures faces crucial resistance @ 5315-5335.
Any Upside upto 5430/5510 would be possible only if Nifty Futures cross & sustain above 5335.
Till Nifty Futures does not manage to cross & sustain above 5335, it would trade in the range 5136-5335.
Crucial Support now lies @ 5136-5156.
Incase Nifty Fut breaks & sustains below 5136, fresh selling would emerge which would lead the index to test lower levels of 5047 & 4968.
Regards,
Team Market View Investments.
9987750901.
Disclaimer : As equity traders/Advisors We, our relatives and friends may have position in the stocks suggested by us. We are individuals and dont belong to any brokerage house or company. All Recommendations are based on technical and/or fundamental analysis and/or Personal observations. Trading in stock markets involves risk . We give Recommendations, opinions or suggestions with the understanding that readers acting on this information take in to account all risks involved with market. Acting on the basis of views expressed here is the sole responsibility of the reader. No responsibility will be assumed by the authors for the consequences what so ever, resulting out of acting on these recommendations. The information herein, together with all estimates and forecasts, can change with/without notice depending on the Market Conditions.
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