Markets turn cautious - Eye on Inflation - Consortium

Indian stock indices closed lower on Wednesday, with most of the losses coming in the last one-and-a-half-hours, as investors remained wary amid lack of fresh catalysts. Investors appear to be taking a pause after lifting the NSE Nifty to 23-month highs. With the October IIP coming in way ahead of estimates and inflation still beyond RBI's comfort zone, the central bank is unlikely to tinker with rates on Dec. 18. It could however announce measures to reign in the liquidity stress in the banking system.

Lack of positive movement on proposed legislative reforms in the parliament and opposition parties' obstructionist approach are also making investors jittery. Opening a little higher at 5900, the Nifty began to slide and till about mid-session meandered with a downward bias. But, a wave of late selling sent it reeling to 5841, just above the earlier low of 5838. It finally ended at 5851, down 37 points.

Recent High fliers stocks were worst affected. For the day coming by Nifty is placed just near its support of 5850 and any further weakness from hereon can make it to slip to 5800 odd level. Traders and investors sentiments were dented quite a bit and would cap the upside despite slew policy announcements yesterday. November inflation data will be released today and should be around 7.5%. Any big deviation could make market even more volatile. Overall caution is likely to prevail in today trading but support lies at 5850.

Source : Equity Bulls

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