Downside move to continue in Nifty - Religare

Disappointing macro economic numbers, viz, IIP and CPI inflation, resulted in an extension to the prevailing down side move for Nifty . The domestic benchmark index opened on a weak note on Friday and traded with a negative bias through out the day. Nifty tried to recover in the second half but the efforts could not be converted into favoring results hence lower lows were witnessed. Once again the interest rate sensitive sectors like Bankex, Realty and Infra became the root cause of the fall as they fell the most among NSE sectoral pack.

After the four days of successive decline, Nifty has reached near to the immediate support mark of 6100 level as per the uptrending channel formed on the daily charts. Besides, oversold positions in index majors will also see some rebound in the coming sessions. It's advisable to keep stock specific approach and avoid overleverging at current juncture.

Key benchmark indices dropped as a sharp uptick in consumer price inflation in November 2013 raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. Banks stocks declined. Capital goods stocks declined as higher interest rates could put spanner in the works for a likely revival of investment cycle. Shares of two wheeler makers also declined. The market breadth, indicating the overall health of the market, was weak.

Source : Equity Bulls

Keywords