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9am with Emkay |
Contents
n Research Views
Industrial production growth for the month of October likely to be above market expectations
Industrial production growth for the month of October FY11, to be announced tomorrow, is likely to be above the market expectation of 8.5%. This is mostly due to the presence of a favourable base effect and a good turn out in the monthly production of electricity, crude oil and coal.0
The impact of a favourable base effect could push the YoY production figures to 8.8% levels. The increase in core industries’ production would take these figures up further to levels of 9% and above. Overall there is a good 60% probability of the above mentioned turnout.
n Dealer Comments
The markets did start the day’s session on a positive note with almost 75 odd points upward gap tracking mixed cues from the global markets particularly the Asian counterparts. Post positive opening markets immediately slipped in the red and thereafter traded around the closing levels till almost 11.00 am. Post this, markets continued its downward journey as rumor of more scrips may fall prey to price rigging event led to huge carnage in the broader markets as investors resorted to a very heavy panic selling across the board. The broader markets were also beaten down badly on margin deficit selling and in anticipation of price rigging furore may further widen. The indices were beaten down by huge selling in consumer durables, metal, realty, banking, healthcare and select auto stocks. Finally the markets continue to close the day on a negative note towards the end at almost day’s lows with Sensex losing a hefty 454 points or 2.31% lower to settle at 19242 levels while Nifty also lost 137 points or 2.32% lower to settle at 5766 levels. The overall market breadth indicating the strength of the market was extremely weak as broader markets witnessed very heavy selling action with Midcap index and Smallcap index losing almost 5.5% each and was at almost – 9 x. The overall traded volumes were quite higher compared to the earlier day by almost 30% and were at Rs 1653 bn. While delivery based volumes were also higher compared to the earlier day at 46.2% of the total traded turnover. Among the Fund activities FII’s were net sellers to the tune of Rs 13.06 bn on 8th December 2010. While on 9th December 2010 FII’s were net sellers to the tune of Rs 12.96 bn in the cash segment while in the F&O segment FII’s were net buyers to the tune of Rs 8.20 bn while Domestic Funds were net buyers to the tune of Rs 8.28 bn.
n Technical Comments
Slips below 5800
In the final hour Nifty was not showing any signs of recovery and continued to bleed, shed more than 100 points, to slip below 5800 – psychologically important level. Moreover, market breadth was very discouraging with decline to advance ratio of 15:1. Since our short term target has been met and Nifty is looking quite oversold on hourly chart, we are anticipating a minor bounce from current level. But to confirm the bounce we require a daily positive close and since that is not the case, we have left our short term bias blank, as of now. Moreover, currently Nifty is at a key support of an internal trendline present of weekly chart. Taking this into account, we feel that chances of an upside pull back are quite bright.
BSE Metal:
BSE metal index has broken its 200-DSMA and is still looking weak, hence during a bounce one can add fresh shorts in metal stocks.
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