Undercurrent seems to be negative - Alex Mathews

Weakness was seen all the day with Nifty VIX jumping around 5% towards 19.69. It opened on a negative note and slowing moved down during the day and minor attempts to support the market also didn't work. Most of the sectors on BSE were down especially IT, Tech, rate sensitives like realty, banking and exporting companies. Global markets were all down further deteriorating the situation back home. According to the MET department, the rains, even though reached whole of India, were 1% below normal. On Friday, data showed that the merchandise exports jumped 46.4% to $29.2 billion in June 2011 over June 2010. Tomorrow is going to be a crucial day as we are expecting the q2 numbers of Infosys and also the data on Industrial production for the month of May 2011 and it is widely expected to be around 8.2%. Banking shares felt the pressure as peers in Europe slipped as sovereign debt worries continued to haunt the Euro zone. The market breadth, indicating the overall health of the market, was negative. On BSE, 1,568 shares declined and 1,324 shares gained. A total of 120 shares remained unchanged.

Nifty today came to a close for the day fortunately above 5600. But the under current seems to be negative and tomorrow being crucial due to Infosys numbers, the markets will be highly volatile till the result is out. For Nifty the major resistance is there 5662 and 5701 while the support is there at 5584 and 5542 levels.

Global markets were all deep in red tracking Euro zone debt concerns. Italian bonds yields surged on concerns on Europe's sovereign debt crisis. Even Italy's market regulator asked short sellers to disclose positions. The US stock futures were trading extremely negative as US banks like JP Morgan, Goldman Sachs etc dropped in Germany. On the commodity front, crude and metals slipped. Crude fell towards $95 on expectation of fall in demand from China and US. Precious metal Gold may move up further as the concerns over European debt is climbing and Gold will attract fund as a safe haven.

Source : Equity Bulls

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