NIFTY OUTLOOK FOR 16th & REVIEW

HIGH VOLATALITY, POLL RESULTS THE GUIDING FORCE

Inputs by

Dr.Bhuvanagiri Amaranatha Sastry

Astro Technical Analyst

Saketha Consultants, Hyderabad

sastry.saaketa@gmail.com

09848014561

http://www.saaketa.com/AstroTechnicals.aspx

Nifty closed flat for another  day but continued to close above 7100 mark for  Three days in a row. Stop loss for Nifty may be maintained at 7000 (on close basis). High degree of volatility can be expected in view of the Poll Results day. While Global cues, Quarterly results   and  Funds flow  are expected to broadly guide the market movement, based on the present market position , market can be expected to be in tune with election trends and as NDA is expected to return to power, Market can be expected to improve as trends become clearer. (barring negative surprises.).

Nifty                               7123  +14

Review for Thursday :: Calm before Storm … !!!

MArket traded in a narrow range and closed nearly flat with minor bullish bias for the day. 28 of Nifty stocks closed in the red and  broader market too  was negative  with  Advance Decline ratio at about 1:1.75. In otherwords, despite an uptick on Sensex / Nifty, broader market was weak. Energy, FMCG indices gained while Media, Realty, PSU Bank, Pharma and Auto indices declined. HDFC Bank, ONGC, HDFC and Tata Steel contributed about 25 points to Nifty’s gain while ICICI Bank, Asian Paints, Bajaj Auto  dragged down by more than 15 points.

 

ONGC, Tata Power, GAIL, Power Grid, NTPC   remained major gainers  among Nifty stocks while Asian Paints, Bajaj Auto, Bank of Baroda, NMDC, Mc Dowell   remained   losers.

 

Apollo Tyres, Siemens, ONGC, Titan,     remained major  gainers  among F&O stocks while Asian Paints, Tata Chem, IB Real estates, KTK Bank, Arvind  declined among F&O stocks.

NEW CLOSING HIGHS BEFORE ELECTION RESULTS DAY

After a day's breather, Indian stock markets today continued to rise with both Sensex and Nifty logging fresh closing highs on fag-end buying in an otherwise choppy session ahead of the Lok Sabha poll outcome. A fall in April wholesale inflation also provided some succor even as cues from Asia and Europe were mixed. The BSE 30-share Sensex resumed almost stable but immediately bounced back to a high of 23,971.78, up almost 157 points on sustained capital inflows and on hopes that new government will prop up growth and quicken economic recovery. However, participants appeared to turn jittery and Sensex fell to a low of 23,742.75. Some late buying helped Sensex rebound to a new closing peak of 23,905.60, showing a recovery of 90.48 points or 0.38 per cent. Yesterday, it had declined 56.11 points from its previous closing peak of 23,871.23. "For second consecutive session, the benchmarks were remained in a narrow range and closed slightly in green...investors opted to remain on sidelines ahead of final results of elections on May 16," said Jayant Manglik, President-retail distribution, Religare Securities Limited.
"All eyes are now glued on final election outcome and expecting it to fall in line with exit poll numbers. Any major deviation may attract negativity but so far all indications are in the favor of northward bias to prevail," he added. Exit polls have projected that BJP will emerge as the single largest party. Smart buying in HDFC Bank, HDFC, ONGC, RIL, ITC, Infosys, HUL, Sun Pharma, Axis Bank, NTPC, M&M and Tata Steel acted as support, while falls in ICICI Bank, L&T, Bajaj Auto, TCS, Tata Motors and Wipro, limited the gains. Similarly, the 50-issue CNX Nifty of the NSE also moved erratically in a range of 7,152.55 and 7,082.55 before recording a new closing high of 7,123.15. It gained 14.40 points or 0.20 per cent today over Wednesday's closing of 7,108.75 when it had ended flat.

17 scrips out the 30-share Sensex pack ended higher while others ended lower. Major gainers were Tata Power (3.07 per cent), NTPC (2.95 per cent), ONGC (2.56 per cent), Gail India (2.16 per cent), HUL (2.08 per cent), Tata Steel (1.89 per cent) and Sun Pharma (1.72 per cent). HDFC Bank (1.66 per cent), HDFC (1.59 per cent), Axis Bank (1.53 per cent), Maruti Suzuki (1.47 per cent) and M&M (1.28 per cent) also gained. On the other hand, Hindalco dropped by 1.98 per cent, Sesa Sterlite 1.88 per cent, Wipro 1.50 per cent, Dr Reddy's 1.46 per cent, L&T 1.20 per cent and ICICI Bank 1.17 per cent. Among the S&P BSE sectoral indices, Consumer Durables rose by 1.52 per cent, followed by Power 0.97 per cent and Oil&Gas 0.95 per cent while Realty fell by 1.11 per cent, Capital Goods slipped 0.90 per cent. Reflecting heavy profit-selling in second-line stocks, the total market breadth turned negative as 1,743 stocks finished in red while 1,156 stocks ended with gains. The total turnover dropped to Rs 3,223.00 crore from Rs 3,547.55 crore yesterday. 

HIGH ALERT ON POLL RESULTS DAY

To ring fence the capital market from possible manipulations against the backdrop of election results tomorrow, Sebi as well as bourses and other market entities have prepared an elaborate vigil mechanism.
While market authorities have been already monitoring stock movements very closely since last few days, which saw markets surging to record highs on the back of exit poll and other predictions, they are now mainly focussing on tackling any possible shocks tomorrow and on Monday.
The counting of votes for 543 Lok Sabha constituencies will begin tomorrow at 8 am, while clear trends are likely to emerge by afternoon and final results may keep coming out till late evening.
The markets would open as per their normal time at 9 am and close at 3.30 pm, leaving scope for impact of the results on Monday as well after weekly trading holidays on Saturday and Sunday.
A special team at Securities and Exchange Board of India (Sebi) is keeping a close tab on the stock market movements, while another team would also be monitoring the election results as they get announced to understand whether price movements are linked to outcomes in various constituencies, sources said.
According to sources, the stock movement of companies related to Gujarat and many others are being closely watched as they have witnessed huge rallies in recent weeks.
Besides Indian market movements, the trends in overseas markets and factors affecting foreign institutional investors are also being monitored almost on a 24/7 basis.
Besides, stock exchanges have put in place various circuit filters to stave off excessive volatility in stocks as well as derivatives segments. Brokerages and other market entities are also advising investors to ensure that there are no sudden spurts or falls in the market, while investors are being discouraged from excessive margin exposure.
The aim is to ring fence the interest of investors and ensure smooth functioning of the market tomorrow by preventing manipulative activities, sources said.
The preparations are being done while keeping in mind the experience of previous times during the day of Lok Sabha poll results.
Apart from tomorrow, market authorities would be keeping a special watch on May 19 (Monday) also to ensure there are no disruptions of any kind. 
Brokerages have sent out advisories to their clients, while trading exposure based on margins -- the multiples of the cash position that investors are allowed to trade in -- is also being curtailed for intra-day trades.
Leading bourses BSE and NSE relaxed the dynamic price bands for stocks that trade in the derivatives segment with effect from May 13.
Stock exchanges have a mechanism of dynamic price bands, commonly known as dummy filters or operating range, which prevents acceptance of orders for execution that are placed beyond the price limits set by the bourses. "In the event of a market trend in either direction, the dynamic price bands may be relaxed during the day in coordination with the other exchange," according to similarly worded circulars from the BSE and the NSE.
The BJP-led NDA is projected to form the government at the Centre with exit polls tonight giving between 249 and 290 seats to the Narendra Modi-led grouping, which is close to the half-way mark in the 543-member Lok Sabha.
The preparations by market authorities have also taken into account their experience during the result day of last Lok Sabha elections.
On May 18, 2009 -- the day when results of last Lok Sabha polls were announced -- markets gained so much that trading had to be halted. That date is still known as 'Magic Monday' in stock market as the benchmark index Sensex posted its biggest ever gain of over 2,100 points in just one-minute trade after investors were enthused by a decisive verdict in the then concluded general elections. The experience was another extreme on May 17, 2004, soon after the announcement of 2004 Lok Sabha elections, the markets witnessed the worst-ever bloodbath on concerns of uncertainty over the economic reforms as the then NDA government was voted out of power.