9am with Emkay; 5 January, 2011

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n        Dealer Comments

The markets did start the day’s session on a positive note with almost 65 odd point’s upward gap tracking strong cues from the global markets particularly the Asian markets. After starting the session in the green for second day in a row markets were unable to sustain the ongoing momentum throughout the day and slipped in the negative zone. Thereafter markets had a very volatile session and kept gyrating between the zones almost throughout the day. The main point to observe in today’s trading was India was among the weakest performers in Asia and Europe till closing bell. Among the factors acting against India at the moment are high inflation, rising interest rates, expensive valuations, lack of reforms and governance issues. Also, the external account has deteriorated in the past couple of quarters, which could be among the sour points for global investors. Today’s spoilsport were the banking stocks which saw very good selling pressure on concerns that the RBI may hike interest rate to tame inflation. Besides selling in realty, auto and consumer durables led the

indices down while buying in fmcg, oil & gas, and technology shares capped the fall to some extent. Finally the markets snapped its four session winning streak and closed the day on a negative note towards the end with Sensex losing 62 points or 0.30% lower to settle at 20498 levels while Nifty lost a mere 11 points or 0.18% lower to settle at 6146 levels. The overall market breadth indicating the strength of the market was marginally negative as broader markets witnessed selling action with Midcap index and Smallcap index losing almost 0.2% each and was at almost - 1 x. The overall traded volumes were quite extremely lower compared to the earlier day and were at Rs 786 bn. While delivery based volumes were also lower compared to the earlier day at 40.2% of the total traded turnover. Among the Fund activities FII’s were net buyers to the tune of Rs 4.22 bn while Domestic Funds were net sellers to the tune of Rs 0.90 bn respectively on 3rd January 2011. While on 4th January 2011 FII’s were net buyers to the tune of Rs 7.17 bn in the cash segment while in the F&O segment FII’s were net sellers to the tune of Rs 2.47 bn while Domestic Funds were net sellers to the tune of Rs 4.91 bn.

n        Technical Comments

Choppy session

Finally, Nifty broke its four-day winning streak and closed the choppy session with a loss of 11 points. Every attempt to go pass the zone of 6176-6181 was unsuccessful. Moreover, the current range of 57 points (6181-6124) seems to be a consolidation phase for the market, which can continue in the coming session too. However, we don’t see much downside in Nifty, barring a minor dip of 50 to 100 points. We still maintain our short term bullish view with a reversal of 5982.

BSE Oil & Gas

BSE Oil & Gas index has gone past the resistance of 50-DSMA, after taking support at the 20-DSMA, which is a sign of strength. Moreover, a hook on daily MACD is confirming the bullish view. Hence in the near term this index can head higher upto 11,100 level.