February 28, 2012

Morning Be!!......frontline Indian equity benchmarks have opened with a gap, regaining some of the lost momentum after four straight days of losses

Indian Markets
As anticipated, the frontline Indian equity benchmarks have opened with a gap, regaining some of the lost momentum after four straight days of losses. So, the BSE Sensex is back above 17,500 and the NSE Nifty has reclaimed 5,300. The buying appears to be secular at the moment, with most index constituents and most sectoral indices on the BSE trading with a positive bias. The market breadth too is favourable for the bulls so far.

Markets began the week on a negative note as it witnessed the biggest one-day fall on Monday since September 2011 led by huge shorts build up and unwinding of long positions. UP election results expected on March 6 and spike in crude oil prices to 10-month high may also have deteriorated investors' sentiment.

While the BSE Sensex finally closed 477.82pts or 2.67% lower at 17,445.75, the Nifty lost 148.1pts or 2.73% to close at 5,281.2. Broad market indices too ended lower as the BSE Midcap and BSE Small Cap indices shed 3.02% and 3.26% respectively.

Currencies
US Dollar appreciated by 0.6% vis-a-vis the Indian Rupee on Monday. The Rupee fell against the Dollar on the back of weak domestic equities that reached a three-and-a-half week low as concerns that rising oil prices may drag worldwide growth.

Outlook
After a sharp slide yesterday, we expect the Indian Markets to open in the green. However, it is likely to face resistance at higher levels later during the day. Immediate support for Nifty is at 5230, while resistance is at 5370 levels. Among the sectoral indices, Realty & Metals look weak, while FMCG & Healthcare look good and could outperform.

Source-HDFCSEC,IIFL

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