Indian Market
The main Indian equity benchmarks have lost ground in early morning trade, as investors continue to react to dismal GDP report for the October-December quarter. Also weighing on the sentiment is weak global cues.
The BSE Sensex shed over 150 points on Thursday as investors shift their focus to a government share sale in Oil and Natural Gas Corp aiming to raise at least USD 2.5 billion.The offer, through a one-day auction, is expected see heavy bidding, including by foreign funds.
Global Market
On the global front, while the ECB’s second LTRO auction has seen robust demand, its counterpart across the Atlantic is not keen on additional stimulus. Federal Reserve Chairman Ben Bernanke has refused to play ball when it comes to QE3. He has not given any indication of further monetary support for the US economy.
The ECB allotted a larger-than-expected 529.5bn (US$713.4bn) in cheap loans to 800 euro area banks in its second-ever three-year long-term refinancing operation (LTRO). Economists had largely expected banks to take up a figure close to the 489bn allotted in the ECB's first three-year LTRO in December.
Banks receive three-year loans in return for collateral at a rate fixed to the ECB's refinance rate of 1%.
Asian markets have not received any boost from better-than-expected data on China's manufacturing PMI. Markets in China is trading mostly flat after two rival manufacturing PMI surveys sent conflicting signals on the health of the world's second-largest economy.
The GDP report was disappointing and it is high time the ‘powers that be’ in New Delhi came up with substantial dose of tonic for the Indian economy. Though external environment and RBI’s tightening have played a role in growth deceleration, policy inertia is as much to blame.
Technical Outlook
A close above 5300 for February has led to the confirmation of a breakout on Monthly candlestick chart. This has reinforced a bullish momentum in the Indian markets. Hence, 5300 is likely to emerge as a good support as it coincides with the trough of 'bullish harami' pattern. Some resistance is expected between 5500 and 5600 levels.
Today's Outlook
The Indian Markets could open flat to marginally in the negative territory and later on during the day the markets could remain range bound with a negative bias. Immediate resistances for the Nifty are at 5450-5500. Downside supports are at 5300-5268. Among the sectoral indices Oil & Gas, Metals and realty could witness correction.
Sources-IIFL, Moneycontrol
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