Markets are very indecisive, the Sensex opened in the red and touched an high of 20,224 (up 57 points), it pared some gains and is currently trading at 20,128, down 28 points. The S&P CNX Nifty is also down 6 points at 6065. Realty stocks weigh while investors are buying into IT stocks.
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Analysts expect downside to continue, "I expect 200-300 point correction on Nifty, which will take the index down to 5800 due to profit booking. Investors can make fresh investments or go long after the minor correction," Subhash C. Aggarwal, CMD, SMC Global Securities added. However, I do not see further downside in the long-term on the back of robust growth prospectus and good quarterly results, Aggarwal added.
After a negative closing last week, technical charts indicate that volatility will continue. Ravi Nathani, technical analyst said, "markets will
be highly volatile as intermediate trend is down, however in the short term, trend would be bearish only if index closes below 5930." Investors could hunt for opportunities to buy on dips and traders could place the long position with stoploss below 5930, Nathani added. Prakash Gaba, also a technical analyst said, “the market is weak and very close to the psychological support of 6000, would not be surprised if a bounce comes in."
Asian markets clawed of the lows plumbed on Friday on concerns of expected rate hike in China's over-heating economy. Japanese shares also saw some respite after it reported growth in the third quarter, gross domestic product rose more-than-expected (up 0.9%) beating economists forecast. The Nikkei 225 index surged 0.7%. Hong Kong shares were seesawing (down 0.6%) due to volatility in mainland Chinese shares, and property stocks leading the gains. China's Shanghai Composite continued its losing streak, the index dropped 0.6%. Strait Times and Taiwan Weighted were trading marginally in the red, and Seoul Composite was up 0.1%.
Realty and FMCG stocks were leading the losses. Orbit Corporation (down 2.2%), Parsvnath Developers (down 1.9%) and Sobha Developers (down 1.3%) were top losers from the Realty space. From the FMCG sector, Godrej Consumers (down 1.2%), Ruchi Soya (down 1%) and ITC (down 0.8%) were the prominent losers.
Investors were cashing in on the banking stocks, ICICI Bank rose 1.9%, HDFC Bank was up 1% and SBI gained 0.7%. IT stocks were also upbeat in the morning session, TCS was up 1.7%, Wipro marched up 1.6% and Infosys rose 0.5%.
Among the stocks on the Sensex. Tata Steel surged almost 3% on brokerage upgrade and second quarter results beating forecast,
JP Morgan raised the target price to Rs 665 from Rs 605. ICICI Bank was up 1.3% and Bharti Airtel rose 0.9%.
Reliance Communication dipped 1.6% after it reported a 40% drop in the second quarter net profit, other losers were Jaiprakash Associates (down 1.9%) and Jindal Steel (down 1.8%).
Broader markets rose marginally, the midcap index was up 0.2% and smallcap index climbed 0.5%. Market breadth was positive, out of 2456 stocks traded, 1461 stocks advanced, while 930 shares declined.