Nifty retraces 50% from its recent top of 6093 - Religare

Monday was the fourth consecutive session when Nifty has closed negative. The index has retraced 50% from its recent top (6093). We are reiterating our view as it seems weakness may persist and as of now there are no signs of revival. Almost all the major indices witnessed selling pressure. Among them FMCG, Realty and Metals were the major losers where as Auto and Tech were the only sectors that managed to close in the green.

The Reserve Bank of India will be declaring its Monetary Policy on Tuesday (30th July), this will act as a major trigger and provide direction to the major indices. Banking counters have contributed the most in the recent fall, going ahead any further fall in these counters may take the index even below its 200 EMA which is placed at 5792 level on the daily chart.

The domestic indices dropped for the fourth straight day as the investors turned cautious ahead of Reserve Bank Of India's first quarter monetary policy review due on tomorrow, July 30,2013; after the central bank announced measures this month to tighten liquidity in the banking system to put a halt on the persistent slide in rupee against the dollar. Another focus will be on the Federal Open Market Committee (FOMC), which holds a two-day policy meeting on Tuesday (30 July 2013) and Wednesday (31 July 2013), after which it will release a statement on central bank policy.

Source : Equity Bulls

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