Tuesday, August 26, 2014

NIFTY OUTLOOK FOR 27 & REVIEW

FORENOON BETTER

Nifty                               7905     -2
While Nifty closed flat for the day, broader market was quite weak with negative  Advance Decline ratio at about 1:1.9. Further, Nifty has been closing in a tight range and  a wide move can be expected before derivative expiry. 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 7945, 7980 and find support at 7865, 7830 for Wednesday. 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 generally  better in the forenoon and could encounter selling pressure towards close.


SENSEX UP, NIFTY DOWN

The benchmark Sensex today erased initial losses and closed about six points up at a new closing peak of 26,442.81, extending gains for the fourth straight session, on recovery in select metal and auto scrips combined with buying in defensive sectors like FMCG and healthcare. The S&P BSE 30-share barometer resumed lower in line with weak Asian cues and moved in a range of 26,481.97 and 26,314.89. It ended at new closing high of 26,442.81, logging a small rise of 5.79 points, or 0.02 per cent. In four straight sessions, the Sensex has gained over 128 points. However, the broader 50-issue CNX Nifty of the NSE eased for the second straight day and closed at 7,904.75, a fall of 1.55 points, or 0.02 per cent. It moved between 7,862.45 and 7,915.45 intra day on alternate bouts of selling and buying. Brokers said investors have slowly come to terms with the potential impact of the Supreme Court's ruling on coal block allocations. As a result, Hindalco, Tata Steel, JSW Steel, Hindustan Zinc and SAIL rebounded from their early lows. However, some counters like Jindal Steel and Bhushan Steel continued to suffer. Heavy selling was initially seen after Competition Commission of India imposed Rs 2,545 crore fine on 14 car makers, including Tata Motors, Maruti Suzuki and Mahindra & Mahindra, for violating trade norms in the spare parts and after services market. However, short-coverings ahead of the expiry of August contract on Thursday aided the smart recovery in auto as well as metal stocks also, trader said. Some shares from power, capital goods and refinery sectors attracted profit-booking while pharma and FMCG were in demand as investors tried to seek safe refuge, they added. "The Sensex closed marginally higher and CNX Nifty closed marginally lower after witnessing intraday volatility...Going ahead, volatility is expected to continue as F&O expiry and GDP numbers are due on Thursday and Friday," said Jayant Manglik, President-retail distribution, Religare Securities.

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