Nifty closes below crucial level of 4800 - Alex Mathews

The markets had opened on a negative note tracking global weakness and uncertain equity markets conditions and trade in a sideways to negative manner throughout the morning session and in the afternoon session we saw huge selling which took Nifty down below 4800 and finally came to a close for the day below it underlining the crude weakness. The market breadth, indicating the overall health of the market, was weak. On BSE, 2,006 shares fell and 820 rose. A total of 128 shares were unchanged. Weak corporate results, growing uncertainty in the global front etc weighted in on the markets today. Today Rupee broke the crucial 52 mark to the dollar which is the all time low recorded for Indian currency. Sustained selling from oil importers, FIIs selling in equity market could be attributed to the present fall. RBI had intervened the currency market today morning but it could not stop the fall in rupee.

Nifty has closed below the crucial level of 4800 and is looking weak despite being in the oversold region. However being the expiry week, we may see a bounce back in Nifty but investors should not expect absolute reversal in the month of November. On the sectoral front, we saw heavy selling in metal, banking, realty and power while no one was spared today.

If we look at the Nifty monthly data pertaining to the last five year, most of the time November has given a negative returns and December has given positive returns. So it the case of US markets, December has remained a positive trend setter for many years and the same is expected to happen this time also. As far as Nifty is concerned, month of December in 2007 gave 6.52% gain, 2008 gave 7.41% gain, 2009 gave 3.35% gains and 2010 gave a 4.64% gain. Also the FIIs had sold shares worth Rs 10833.6 crore for the month of August and in the corresponding months they have bought back shares only worth Rs 3033.7 crore. Global investors book some profits in their investments in equities and commodities by the end of year and for sure equities have not fetch profits for them. On the other hand gold has given them good profits this year and so we may see some profit taking in gold by the year end and some investment being made in the equity front. Being the expiry week we may see some bounce back from the current levels as the markets have entered into the oversold region. The month of November however will remain negative.

Source : Equity Bulls

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