Nifty closes in red - Alex Mathews

Low volume trade ended on a negative note. After opening on a flat note it slipped into red registering the low of the day by noon. Minor recovery was seen in the last hour of trade but faded towards the end of the day and closed in red. Banks were hit the most on reports that the bad loans have increased and RBI has asked the banks to keep aside more capital for their investment in financial entities. Also the sentiment was hit on reports that tax officials from Mauritius are meeting their Indian counter parts for revising the DTAA between the two countries as about 40% of the FII inflow and 42% of the FDI in India are routed through this country. Minor recovery in the last hour of trade was partly on the back of short covering ahead of December expiry which will happen tomorrow. Rollover was decent around 57%. The market breadth, indicating the overall health of the market, was weak. On BSE, 1,709 shares declined and 1000 shares rose.

Nifty today fortunately closed above 4700 after trading below and around it for quite some time. Nifty is expected to get support at 4675 and 4645 while the resistance is there at 4746 and 4786 levels. Tomorrow being the day of December expiry, we may see short covering in the second part of the day but overall trend has not turned bullish.

On the sectoral front, realty, metal, banking, PSU and oil slipped while power sector remained in the positive zone. Metal stocks fell tracking fall in copper prices as hedge funds reduced bets of another spike in global commodity prices to the lowest level since 2009. As crude moved above $100, PSU oil marketing companies were under pressure after Iran warned of shutting down the Strait of Hormuz through which a major portion of gulf oil is transported. European markets showed strength today as Italian bonds rose after borrowing cost fell at the auction. This gave US index futures are boost and strength to trade in green.

Source : Equity Bulls

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