MUMBAI: Indian markets extended losses for fifth consecutive day as profit taking by investment houses and concerns of interest rate hike by Reserve Bank of India spooked sentiments.
Investors have been jittery following 18% year-on-year surge in food prices for the week ending December 25, 2010 resulting in the index for primary articles once again crossing 20 per cent. According to analysts, the RBI is likely to hike rates by month end to curb inflation.
“Factoring in primary and fuel articles rising by an average of 16.5% and 11.2% during December, we expect the WPI data due this week to come in at 8.4% vs.7.5% last month.
Going forward, while the base effect could help, the rise in primary products as well as commodity prices poses upside risk to our Mar 11 estimate of inflation decelerating to 6.5%. We expect the RBI to hike rates on Jan 25,” said Rohini Malkani, Econom IST , Citi India.
Market opened on a weak note and slipped below crucial support levels as the session progressed. Analysts have been advising caution traders to take long positions and wait for the market to stabilise. For, those who have gone short, they are suggesting to cover shorts as a bounce back is expected in coming sessions.
Bombay Stock Exchange’s Sensex ended at 19224.12, down 467.69 points or 2.38 per cent. The 30-share index touched a high of 19720.43 and low of 19158.43 in today’s trade.
National Stock Exchange’s Nifty ended at 5762.85, down 141.75 points or 2.40 per cent. The broader index touched a high of 5907.25 and low of 5740.95 intraday.
If we follow the technical tool "Channels" then also the pattern of the market has confirmed that the market is in falling wave and may fall beyond 5690/18954 (previous low) if it fails to support at 5800 levels.
Any sharper pull back will be an opportunity to reduce weak investments, trading long positions and to create select short (sell) position in the market. Buying "out of money" Put options with a medium term view should be the strategy if markets retraces (upward) to the current fall,” said Shrikant Chouhan, .
BSE Midcap Index was down 2.34 per cent and BSE Smallcap Index moved 2.83 per cent lower.
Amongst the sectoral indices, BSE Realty Index plunged 3.55 per cent, BSE Capital Goods Index fell 3.52 per cent and BSE Bankex declined 3 per cent.
HDFC Bank (-5%), BHEL (-4.76%), Hindalco Industries (-4.44%), HDFC (-4.44%), and Jaiprakash Associates (-4.18%) were amongst the losers.
Infosys Technologies (0.90%) and Bharti Airtel (0.04%) were the only gainers.
Meanwhile, iGate has acquired nearly 63 per cent stake in Patni Computer Systems for $1. 22 billion. iGate will buy 45.6 per cent of the shares of the three founders of Patni -- Narendra Patni, Gajendra Patni and Ashok Patni-- along with the 17.4 per cent stake of private equity firm General Atlantic, iGate CEO Phaneesh Murthy.
Market breadth was negative on the BSE with 2233 declines against 648 advances.
The European market continued to drift lower and the Wall Street is likely to follow suit. At 5 pm IST, Dow Jones futures was down 0.42 per cent, S&P 500 declined 0.59 per cent and Nasdaq moved 0.41 per cent lower.
ET
Investors have been jittery following 18% year-on-year surge in food prices for the week ending December 25, 2010 resulting in the index for primary articles once again crossing 20 per cent. According to analysts, the RBI is likely to hike rates by month end to curb inflation.
“Factoring in primary and fuel articles rising by an average of 16.5% and 11.2% during December, we expect the WPI data due this week to come in at 8.4% vs.7.5% last month.
Going forward, while the base effect could help, the rise in primary products as well as commodity prices poses upside risk to our Mar 11 estimate of inflation decelerating to 6.5%. We expect the RBI to hike rates on Jan 25,” said Rohini Malkani, Econom IST , Citi India.
Market opened on a weak note and slipped below crucial support levels as the session progressed. Analysts have been advising caution traders to take long positions and wait for the market to stabilise. For, those who have gone short, they are suggesting to cover shorts as a bounce back is expected in coming sessions.
Bombay Stock Exchange’s Sensex ended at 19224.12, down 467.69 points or 2.38 per cent. The 30-share index touched a high of 19720.43 and low of 19158.43 in today’s trade.
National Stock Exchange’s Nifty ended at 5762.85, down 141.75 points or 2.40 per cent. The broader index touched a high of 5907.25 and low of 5740.95 intraday.
If we follow the technical tool "Channels" then also the pattern of the market has confirmed that the market is in falling wave and may fall beyond 5690/18954 (previous low) if it fails to support at 5800 levels.
Any sharper pull back will be an opportunity to reduce weak investments, trading long positions and to create select short (sell) position in the market. Buying "out of money" Put options with a medium term view should be the strategy if markets retraces (upward) to the current fall,” said Shrikant Chouhan, .
BSE Midcap Index was down 2.34 per cent and BSE Smallcap Index moved 2.83 per cent lower.
Amongst the sectoral indices, BSE Realty Index plunged 3.55 per cent, BSE Capital Goods Index fell 3.52 per cent and BSE Bankex declined 3 per cent.
HDFC Bank (-5%), BHEL (-4.76%), Hindalco Industries (-4.44%), HDFC (-4.44%), and Jaiprakash Associates (-4.18%) were amongst the losers.
Infosys Technologies (0.90%) and Bharti Airtel (0.04%) were the only gainers.
Meanwhile, iGate has acquired nearly 63 per cent stake in Patni Computer Systems for $1. 22 billion. iGate will buy 45.6 per cent of the shares of the three founders of Patni -- Narendra Patni, Gajendra Patni and Ashok Patni-- along with the 17.4 per cent stake of private equity firm General Atlantic, iGate CEO Phaneesh Murthy.
Market breadth was negative on the BSE with 2233 declines against 648 advances.
The European market continued to drift lower and the Wall Street is likely to follow suit. At 5 pm IST, Dow Jones futures was down 0.42 per cent, S&P 500 declined 0.59 per cent and Nasdaq moved 0.41 per cent lower.
ET
No comments:
Post a Comment