Sensex (19497) / NIFTY (5897) - Angel Broking

Yesterday, our benchmark indices opened on a flat note inline with mixed global cues and witnessed a sudden spurt post the announcement of better-than-expected inflation numbers. However, this optimism didn't sustain too long as indices corrected sharply during the second half to close almost at the lowest point of the day. Capital Goods, Oil & Gas and Auto counters contributed heavily in yesterday's correction; whereas, FMCG, IT and Metal sectors provided decent support to the markets. The advance to decline ratio was strongly in favor of declining counters (A=656 D=1501) (Source - www.bseindia.com).

Despite, better than expected inflation numbers, indices could not sustain at higher levels. During the second half, banking heavyweight, SBI announced their Q3 numbers, which were below expectations. As a result, many front line banking stocks followed by index heavyweights experienced tremendous selling pressure. Eventually, indices closed marginally above the support level of 19414 / 5879.

Going forward, we expect further weakness in the markets once Indices fall below the 19414 / 5879 level. In this scenario, pessimism is likely to continue and indices may drift towards their next support levels of 19000 / 5800. On the flipside, a move beyond Wednesday's high of 19723 / 5970 would certainly put the brakes on bearish momentum seen during last couple of trading sessions. Indices may then rally towards 19768 - 19865 / 5991 - 6025.

Source : Equity Bulls

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