Indian Market
The frontline Indian stock indices have posted decent gains in early morning trade, reversing two days of losses. The NSE Nifty is back above the 5,500 mark after closing below it in the previous session.
The market breadth is positive as the broader indices have resumed their upswing following a two-day pause. Most sectoral indices on the BSE are in the positive territory, led by Consumer Durables, Realty, Metals and Power indices. Teck, Capital Goods, Auto and PSU indices too are up smartly.
Citigroup is believed to have sold 145mn shares at ~Rs 670 per share.The block sale of HDFC shares is likely to fetch Citigroup ~US$2bn, according to reports. The stake sale in HDFC is part of the US bank's efforts to shore up its capital base to meet new global banking rules.
Global Market
Most Asian markets are trading higher, although not by a great deal, as investors cheered economic reports out of the US and Germany.
US stock indices managed moderate gains on Thursday, with the S&P 500 index ending near a 10-month high, as investors welcomed a couple of encouraging economic statistics.
European stock indices closed mixed as a downbeat growth outlook by the European Commission offset an upbeat reading on German business confidence.
coming back to India, the seven-week winning streak is under some threat after two relatively weak sessions. The main indices could close the week in red for the first time this year. It is not necessarily a bad thing. A pause is always healthy after such a rise. For those who missed the rally, such corrections could be a blessing in disguise.
The Indian market could consolidate in a sideways fashion in the near term. Most participants won’t want to take a chance in the run up to important domestic events next month. At the same time, uncertainties over the European debt crisis and geopolitical tensions persist.
Technical Outlook
A ‘doji’ like formation in Thursday's trading session indicates indecisiveness after a bearish engulfing pattern on Wednesday. Any upmove beyond 5570 has the potential to negate the bearish structure and reinforce bullish momentum. One should wait for a breakout above 5570 to initiate fresh long positions.
Currency
The Indian Rupee strengthened for a second day vis-a-vis the US Dollar as exchange data showed foreign investors stepped up purchases of the nation's bonds. Dollar inflows also supported the Indian currency, although traders said this was balanced by dollar demand from oil importers through much of the day.
Today’s Outlook
Today, the Indian Markets could open flat to marginally in the positive and remain volatile in a narrow range. We expect the market to witness resistance at higher levels and correct during the latter half of the session. On the downside, Nifty has a strong support at 5450, while the resistance is at 5535. Among the sectoral indices, Realty & Metals continue to look weak, while FMCG, Oil & Gas & Power could outperform.
Sources-IIFL, hdfcsec
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