The markets signed off 2008 on a bearish note as the bulls failed to hold their own against the bears. The benchmark indices lost under 1 per cent at close. The traded volumes were lower as compared to the previous session, which is a routine indicator on new years eve.
The market breadth was positive as the BSE & NSE combined advance decline ratio was 2245:1381. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 4946 crs : Rs 7039 crs. The bullish pivot of 2955 levels advocated yesterday once violated, set the tone in favour of the sellers.
The indices have closed in the lower half of the intraday range and on lower volumes. That indicates an absence of buyers rather than presence of sellers. The 3070 / 2910 range advocated for Tuesday held as Nifty traded within the specified range in a truncated scenario.
The coming session is likely to witness a range of 2885 on declines and 3045 on advances. The participation levels are likely to be thin and therefore the outlook is likely to be rangebound. The bulls are likely to return in earnest once the Nifty trades convincingly above the 3000 mark with expanded volumes.
The outlook for the markets on Thursday is that of cautious optimism as the near term price discovery mechanism will be inefficient due to low participation levels. Wish you a very Happy New Year.
Vijay L Bhambwani
(Ceo - BSPLindia.com)
(The author is a Mumbai-based investment consultant)