Nifty to open lower on global cues - Consortium

Nifty declined by 52 odd points to close at 5987.25 - nearly 0.85% lower than the day's high of 6938.50.Nifty has declined in last four out of the five trading sessions. For the past two trading session Nifty had closed below the psychological level of 6000. Sustained selling by domestic institutions has been pressuring the markets.

PSU banking stocks lead the falls in the market after BOB reported lower than expected Q3 result. BOB slipped by 8% to close at Rs810. Most of the PSU banks like SBI, Union Bank, Bank of India, Oriental Bank and Allahabad Bank had a rub off effect and declined by 2-4%. Both power finance companies REC and PFC surged by 3% due to impressive quarterly result.

Asian markets surged as U.S. payrolls expanded and China services industries grew at the fastest pace since August. Phama stocks witnessed profit booking (Index down 1.4%). Ranbaxy declined by 3.4% to close at Rs433 as a group of American consumers has approached a US court to consider a complete recall of Ranbaxys generic drug of blockbuster Lipitor from pharmacies and consumers. Others like Lupin Labs, Cipla and Divi's Labs declined by 2-3%. However Glenmark has closed flat at Rs514. The company announced a new discovery and the Initiation of IND Enabling Studies of a Novel Monoclonal Antibody Targeting OX40.

Capital goods stocks declined after BHEL reported lower than expected quarterly result (Index down 0.6%). BHEL declined by 3% to close at Rs219. Others like NTPC and BGR Energy declined by 1% each.

Tech stocks witnessed profit booking from the intra-day high (Index down 0.2%). Auto stocks witnessed fresh buying (Index up 0.5%). Tata Motors has gained 4% to close at Rs292 after Friday's freak trade. However Maruti has declined by 1% to close at Rs1599. Both Hero Honda and Bajaj Auto gained due to impressive monthly sales. Nifty February future closed at 5994 down 42 points.

For the day coming by, global cues are rusty as US markets fell about 1% Monday in their worst drop of the year, as uncertainty over Europe rattled investors and pushed Spanish bond yields higher. Asian markets are also falling in tandem. Technically Nifty is below its 20 days moving average indicating underlying weakness. Support now exits around 5940 level which coincides with 50 days moving average. This level is also the previous swing low.We believe that nifty will take support around this level on closing basis. Thus take contra call around 5940. However, upside seems capped at 6025 / 6050 level.

Source : Equity Bulls

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