Nifty, Sensex to be volatile

By Alex Mathews - Research Head, Geojit BNP Paribas

The markets had opened on negative note tracking global peers and tried many time to break the green line but failed. We saw further selling pressure in the second part of the day with the markets touching the lowest point of the day and finally closed in red. The cues from Europe were also not supportive as the result posted by Societe Generale was disappointing.

In the Asian front, markets retreated after moving up in recent days as companies reported declining earnings and due to lower metal prices. Further, as an exception, Nikkei rose during the day as Bank of Japan kept the key interest rate on hold at 0.1%. In the US front too, the cues were not supportive during the day as the US index futures were down indicating that DOW could fall at the opening. Finally our markets came to a close in red with Sensex down 0.62% and Nifty at the same time down 0.53%.

In the domestic front, news came in that the Government has approved a 10% hike in Urea prices with effect from April 1st and the Fertilizer subsidy will go directly to the farmers. As the per the new fertilizer subsidy plan the companies will be able to fix the retail price of the nutrient based fertilizer where the subsidy will be fixed and this is expected to attract more investment. This news came as lifeline with stocks like RCF, GNFC, Nagarjuna Fertilizer, FACT, and Coromandel Fertilizer etc zooming and is expected to continue their uptrend tomorrow also.

On the sectoral front, selling was seen in realty, oil, metal and auto while minor buying was seen in consumer durable, banking and IT. On the stock specific front, Omaxe auto, Nilkamal, Abbot India, JM Financials, and Subros etc attracted good buying interest while in the frontline Unitech, Suzlon, Reliance, Sterlite etc kept the market breadth negative.

The market is expected to show some volatility in coming days with a positive bias. Nifty is having resistance at 4935 and 4950 while the support is there at 4860 and 4825 levels. Still the main event for which our markets are waiting is the Union budget and as the fertilizer subsidy plan announced today may make the various sectors more eager.

Source : Equity Bulls

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