Crude Spoils Party in Indian Bourses - Alex Mathews

The markets had opened on a positive note and remained on the gaining side but later slipped into red to move in a sideways manner till the noon session. Later in the second part of the day we saw some selling pressure coming in to finally close for the day in red near to the low. Crude prices have shot up above $110 for the first time since September 2008 and were the main factor behind today's selling. Precious metal Gold has broken all its previous records and is trading at all time highs.

Monsoon are expected to be good this time around as per the MET data and as we had bumper Rabi harvest this time, the food inflation is expected to ease in near future. But given the present situation, if crude price don't cool off, then authorities will be left with limited option but to hike the fuel as well as cooking gas prices. The government is holding its decision on fuel price hike due to election in some of the states. Recent strong FII inflows have given significant support to the markets and this has caused the rupee to gain considerably. But in the coming days we may see rupee hitting resistance and can come down a bit. Next major event that the market is going to see is the Q4 results.

Nifty today moved below the 5850 mark and is having support at 5743. A consolidation should be taken as a positive thing as it gives an opportunity for acquiring stocks at lower levels.

We saw profit booking across the board with major selling seen in banking, auto and infrastructure stocks. Aviation stocks saw selling pressure as crude price hit multi month high. Same was the case of PSU Oil marketing companies like BPCL, HPCL, IOC which also came down. Stocks in the metal, fertilizer, agri related stocks etc can on investors radar in the coming days.

Nikkei rose after April option prices settled higher than that expected and had little impact from the major earth quake which rattled the country the other day. But however markets in US closed on a lower note overnight after the earth quake measuring 7.1 on Richter scale reignited the fear of another nuclear crisis. Tsunami warning was issued but later withdrawn. US initial jobless claims data showed a decrease towards 382000 against 392000 and the consumer credit rose to 7.6 billion against 4.4 billion.

Source : Equity Bulls

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