February 23, 2012

Morning Bell.....Nifty opening below the 5500 level amid volatility


Indian Market

The Nifty was subdued in an early trade, opening below the 5500 level amid volatility. Consistent inflow of foreign money has been supporting the market whereas on other side, concerns like rising oil prices, disappointing economic data from major continents like US & Europe still weighed on the market.

The main Indian equity benchmarks have turned virtually flat after a positive opening, tracking weakness in most Asian markets. Markets in the US and Europe also ended in the red on Wednesday amid concern that the long-running debt crisis in the eurozone was having an adverse impact on the global economy.

Wednesday’s drop was only the second such fall this year. That goes to show the groove that the market is in, thanks largely to the liquidity deluge unleashed by global central banks. Wednesday’s provisional FII figure should provide some succor on the F&O expiry day.

Global Market
Doubts over the effectiveness of the second bailout for Greece is also acting as a dampener for the world equity markets following a strong start to the year. Fitch Ratings cut Greece's sovereign credit rating to C from CCC. The eurozone's composite PMI fell in February, raising the specter of recession. Europe and Greece may continue to be in the spotlight in the coming days as well.

Commodities
Crude is at a nine-month peak while gold is at three-month high. The dollar is at seven-month high vs. the yen. We could see a choppy session with intraday gyrations possibly peaking in the afternoon.

Today’s Outlook
Today, the Indian Markets could open on a flat note and remain volatile in a narrow range. It might make an attempt to inch higher during the day, but is likely to find resistance at higher levels. On the downside, Nifty has a strong support at 5450. The immediate resistance for Nifty is at 5560. Among the sectoral indices, Auto, Realty, Capital Goods & Banks are looking weak and could underperform, while FMCG & Oil & Gas could outperform.
Sources-IIFL, hdfcsec, ET, moneycontrol

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