Continued fund outflow and weakening rupee dampened the sentiments in Indian Markets - ZENMoney

Domestic indices opened the day on a gap up note after Reserve Bank of India announced measures of relaxing rules on mandatory bond holdings for banks, to protect lenders from large mark-to-market losses and on further statement that it will buy long-dated government bonds worth Rs.80 bn. Markets pared its initials gains as investors remained cautious awaiting the release of the Federal Open Market Committee's July meeting minutes today for hints as to when the stimulus withdrawal will begin. By noon, concerns over continued fund outflow and weakening rupee (reaching all time low @64.45) have dampened the market sentiments. Markets witnessed selling pressure in the afternoon session with selling witnessed in front liners and also taking weak cues from other global markets. Indices ended the day in Red.

On the sectoral front, CD and Banking are the only sectors which witnessed some buying interest. Bank stocks rallied after the RBI relaxed some rules that will help banks deal with the notional or mark-to-market loss in their government bond portfolios due to a recent sharp fall in bond prices. Metal, Oil&Gas, Realty and FMCG sectors were among the most beaten sectors followed by Health Care, Capital Goods, Power, Auto and IT sectors.

The Indian markets are likely to open on a negative note mirroring global market movement and will remain volatile thereafter tracking domestic cues. Weak economic data coming in from China and FOMC meet indicating an increased support for a stimulus tapering will keep global markets subdued in the near term.

Domestic sentiments remain extremely weak as the rupee continues to create new lows despite measures to control its slide. Continuing sell off from the FIIs is further likely to put pressure on the Indian markets. Only decisive policy measures from the government and the RBI can improve market sentiments now.

Crude prices have retreated from their high in the last two days and are likely to be range bound in the near term on concerns about tapering of stimulus measures. Further fall in crude prices will be positive for the Indian market.

The markets continued to witness FII sell off. As per provisional figures they net sold equities worth Rs 792.11 crore on Wednesday. Any reversal in this trend can provide some stability to the market.

For the Nifty 5449, 5595 and 5830 are the immediate resistance levels, while 5212, 5122 and 4887 are its immediate support levels.

For the Sensex 18381, 18855 and 19615 are the immediate resistance levels, while 17619, 17333 and 16572 are its immediate support levels.

Source : Equity Bulls

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