Nifty closes near to lowest level of the day - Alex Mathews

Markets after opening on a flat to negative note, witnessed heavy selling throughout the day and came to a close for the day at the lowest point of the day. Major selling happened in the morning session and later in the second part of the day the markets remained weak ahead of the EU summit. The Central government had put the decision to allow FDI in multibrand retail on hold but decided to go forward with 100% FDI in single brand retail. This has created an impression that India may back track on many of its proposed reforms due such political pressure which may impact the growth of the economy. The food inflation had fell to 39 month low for the fourth week of November. Food inflation was registered at 6.6% for the week ended November 26th against 8% in the previous week. Inflation in the Primary Articles group fell to 6.92% in the week under review, from 7.74% in the week ended November 19 and Inflation in the Fuel & Power group stood at 15.53% in the week ended November 26.

Nifty today closed near to the lowest level. The gap it had made last week had to filled up and for that it has to come down towards 4860 levels. Today it has closed at 4943 and is having support at 4893 and 4860 levels while the resistance is there at 4997 and 5043 levels.

We saw some huge selling happening in Capital goods, realty, metal, power and oil leaving no one on the gainers side. Capital goods, power etc fell on reports that the industrial output declined by 7% in October 2011. Metal stocks fell on the back of fall in metal price on LME. Banking and realty stock witnessed profit taking. The market breadth, indicating the overall health of the market, was weak. On BSE, 1,959 shares fell and 791 shares rose.

European markets were down and are all keeping a close watch on the EU meeting scheduled tomorrow. Having said that, the S&P is running around with its rating whip and is warning many states and banking institutions of a possible downgrade. The upcoming EU summit is crucial because if steps taken aren’t sufficient enough, then we may see S&P downgrading major European nations which had been already warned. US futures are trading in red indicating a negative opening for DOW. Later in the day we are expecting Japanese GDP and Chinese CPI numbers along with us initial jobless claims and consumer confidence.

Source : Equity Bulls

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