NIFTY VIX slips 10% on easing fears - Alex Mathews

Market had opened on a positive note tracking Asian markets and for a short period slipped into the red but recovered strongly supported by domestic and international cues with the markets climbing the hill for the rest of the day and closed for the day at the top. The Nifty VIX slipped around 10% today easing the fear of the investors. The market breadth, indicating the overall health of the market, was strong. On BSE, 1,671 shares rose and 1,092 fell. The next major trigger for the market is the Q2 number which will start to flow from Wednesday with Infosys. The quarterly numbers are expected to moderate this time due to rising interest rates and inflation. But this has been already factored in and may not have a major negative impact on the markets. Apart from that we are going to see some important economic data coming our way this week like the IIP number for the month of August on 12th of October and inflation for the month of September due on 14th of October. One another thing is the half year RBI meet scheduled on 25th of October and it is widely expected that RBI may press the pause button as far as the interest rates are concerned and even may see some reduction in the reserve ratio. Today Nifty closed above the crucial resistance of 4955 and is having next resistance at 4999 above it can move towards 5026-5050 while the support is there at 4955 and 4911 levels.

On the sectoral front, we saw huge buying in realty, IT, consumer durable, oil and auto. Most of the sectors gained today except Healthcare. Metal stock especially base metals gained as tensions on debt crisis in Europe eased a bit and prices moved up on hopes that the manufacturing may revive. Crude stayed around $83 all the day and brought buying in oil exploration companies while selling was seen in oil marketing PSUs. Automobile stocks gained on expectation of good sales in coming festival months and expects the Central bank to pause further rate hikes.

Asian markets were trading mixed with Nikkei in green and Hang Seng flat after European head's pledged their full support to recapitalize the European banks to shield them from the debt crisis which is affecting the growth. However Chinese stocks fell as small banks and developers fell after housing sales fell on speculation that the monetary policies won't be eased anytime soon. US index futures were trading up by 100 points on European move and on improved forecast that recession in US may ease away on the back of good nonfarm payrolls and slowing unemployment rates. The private nonfarm payrolls rose to 137000 from 42000 previously.

Source : Equity Bulls

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