NIFTY OUTLOOK FOR 26 & REVIEW

FORENOON RELATIVELY BETTER

Nifty                               7907     -6

Supreme Court verdict on coal blocks allocation had given a jolt to the market as it fell sharply from higher levels and close with a minor loss . However, Nifty continued to close above 7900 mark and short term weakness  would set in only when it closes below 7850 and further strength would be reinforced only when it surpasses 7970. Nifty spot is expected to encounter resistance at 7950, 7985 and find support at 7865, 7830 for Tuesday. While Global cues  and  Funds flow  are expected to broadly guide the market movement, based on the present market position, market can be expected to be relatively better in the forenoon and could encounter selling pressure in Second half of the day.

SUPREME COURT VERDICT PUT BRAKES TO MARKET

Indian markets hit new highs today but the Supreme Court's ruling on coal block allocations triggered a wave of selling, espcially in metal shares, after which the Nifty surrendered gains to end in the red while the Sensex limped to a new peak on closing with its 17-point rise. The S&P BSE Sensex, which was up by over 210 points at mid-session after it hit new life high of 26,630.74, washed out major part of early gains. It managed to settle in the green, up by 17.47 points, or 0.07 percent, at 26.437.02. On a closing basis, this is higher than 26,420.67 hit on August 19. The wide-based 50-issue CNX Nifty of the NSE also recorded its fresh intra-day historic high of 7,968.25, but came off from the new peak on late selling to end at 7,906.30 -- a fall of 6.90 points or 0.09 per cent. On intra-day basis, the Nifty crossed previous peak of 7,929.05 hit on August 22. The Supreme Court today held that all coal block allocations made since 1993 till 2010 before pre-auction era during previous NDA and UPA regimes have been done in an illegal manner by an "ad-hoc and casual" approach "without application of mind". As a result, metal stocks like Jindal Steel, Hindalco, Bhushan Steel, Tata Steel, Sesa Sterlite, JSW Steel, Hindustan Zinc, SAIL and NMDC closed down with 1.89-13.97 per cent loss. Besides metal stocks, realty, power, banking and capital goods counters too attracted profit-booking. Had there not been smart rise in TCS, ITC, HDFC, Infosys, HUL, M&M, Dr Reddy's Lab, Maruti Suzuki and Hero MotoCorp, the Sensex too would have closed deep in the red. "Market sentiment was strong till mid-session, however, post the Supreme Court's decision, stating coal allocation since 1993 till 2010 as illegal, triggered strong selling in select stocks like Hindalco and JSPL. Other sectors including power and some mid caps also followed suit," said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio. Globally, Asian markets mostly rose Monday, while the dollar hit multi-month highs against the yen and euro after the US Federal Reserve chief seemed to indicate a shift towards an interest rate rise sooner than expected.