A daily wrap up on the market, which will keep you updated on what happened in the day and what to expect & news to watch out for the next trading session
5970 to serve as a formidable resistance. Any bounce back may not sustain for long.
It was a pullback session for markets today. Although markets changed directions several times during the day, the trend for today was a rising market and NIFTY and SENSEX ended with of 0.04% and 0.03% respectively. Despite the 3% slide seen in the SENSEX since 1st February, 2013 it still trades at 13.7 times forward earnings versus 10.2 times for the MSCI Emerging Markets Index. A dangerous trend has been emerging in Indian markets over the past few days in which FIIs have been net sellers in Indian markets despite the index going down. This statistic should be viewed with caution as a downward trending market could ultimately dampen FII sentiment and force a huge sell-off and bloodshed in Indian indices.
Markets in China and Hong Kong are still reeling due to concerns on Fed's comments about stopping monetary easing. SHANGHAI COMPOSITE closed the day 0.51% down whereas HANG SENG closed 0.54% down. NIKKEI brushed aside Fed concerns to gain 0.68% at close. European markets, too, opened strong with FTSE gaining 0.77%. DAX rose 0.61% as Germany's business confidence index rose to 107.4 in February, 2013 from 104.3 in January, 2013 and versus Bloomberg estimates of 104.9
Technical Wrap
Nifty ended the day almost flat at 5850. It is now near the make or break support of 5850, however it appears highly likely that the support may be broken in the next few sessions and Nifty may witness a severe sell off till 5700 and below that 5565 is a possible downside target for Nifty on a positional basis. On the higher side any counter trend bounce would face severe resistance near 5900 and beyond that the level of 5970 appears like a very formidable resistance to cross. We advise short selling on a bounce till 5900 with a stop loss of 5970 for a downside target till 5715 and below that 5565 over the next few weeks. High caution is advised for Nifty long positions at this juncture.
