Nifty Outlook Seems to be weak - Alex Mathews

We saw an extremely volatile session today with a negative outlook ahead of the F&O expiry happening this Thursday. The ups and downs during the day were high enough for investors to enter an exit but equally doubtful of a carry forward. Second part of the day saw heavy selling pressure even though Reliance Industries gave support to the markets. Auto, capital goods, metal and banking were the weakest sector while Oil and gas held strong.

Auto stocks continued to slip on fear of a hike in excise duty in the Union Budget. Positivity was seen in the Oil and gas segment as crude jumped to $92 overnight on worsening unrest in the Middle East. Rising crude price will again put the government under pressure which is expecting the inflation to ease towards 7% by the end of March 2011.

Rate sensitive sector which gaining grounds in the recent past as inflation numbers started showing a downtrend, today slipped on fear that RBI may be forced to take more steps. Auto and Aviation stocks slipped today on rising crude prices and fears of crude moving above $95. Paper manufacturers like Andhra Paper, Sesha paper, JK Paper etc moved up today on expectation that the upcoming budget may have something favorable for them. Fertilizer stock like GNFC, GSFC moved up today which didn't join the recent fertilizer stocks upmove.

Nifty however managed to close away from the day's low even though in red. But the outlook seems to be weak and it is having support at 5436 and 5420 while the resistance still is at 5500 and 5535 levels.

The markets in the global front slipped on growing unrest and uncertainty in Libya and fears that this may spread to other countries like Saudi Arabia, China etc as small protests have started to emerge there as well. Asian as well European markets were in deep red and the US index future was down around 115 points at one point in time indicating a negative trade for DOW when it opens after the US Presidents Day holiday on Monday. Also the economic data showing the US home prices probably had its biggest 12 month drop in a year indicating that housing market in US is struggling.

Source : Equity Bulls

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