Outlook for Nifty turns negative

MARKET WRAP by Alex Mathews, Research head - Geojit BNP Paribas Financial Services

The markets had opened on a negative note tracking the global markets and traded lower during the morning session but we saw good recovery coming into the markets in the second part of the day and came to a close for the day in red but very much off the day's low.

The US markets were up the other day but the major decision came after the market hours and so the markets didn't take in the effect. The Federal Reserve the other day raised the emergency lending rate from 0.5% to 0.75% effective from 19th February 2010 for the first time since the global meltdown. The Asian and the European markets which opened after this decision fell drastically with banking stocks taking the hit.

The US markets are expected to react to this move from the Federal Reserve today. In the second part of the day the PM's economic advisor had said that India's economy is likely to grow at over 7.2% in the current fiscal year which helped our markets to make a recovery. Also a foreign brokerage had said that the Indian equities are expected to jump near to 33% this year.

The US index futures were down near to 63 points indicating that DOW could fall at the opening bell. Our markets finally came to a close with Sensex down 0.83% and Nifty at the same time down 0.88%.

On the sectoral front, the major losers' were Realty down 3.37%, Metal down 2.49%, Consumer Durable down 1.44% and Power down 1.16% leaving just Healthcare up 0.07% on the gainers side. Stock specific buying was seen in Hotel Rugby, Gallantt, Duncans, Maruti, Ranbaxy, ABB etc while JP Associate, DLF, RCOM, Sterlite etc remained on the weak side.

The outlook of the market has once again turned negative ahead of the budget and is expected to bring in high volatility. For Nifty the major support is there at 4810 and 4700 while the resistance is there at 4870 and 4900 levels.

Source : Equity Bulls

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