The markets opened on a back foot, in line with the Asian markets and closed above the intraday lows as bear covering and scattered buying lifted values.
The market breadth was marginally negative as the BSE breadth was 1195 : 1443. The capitalisation of the breadth was also marginally negative as the consolidation after a big upthrust was all too evident. The banking space was the biggest drag on the markets as the unwinding was at its highest in this sector.
The markets have closed at the median levels of the intraday range and on mediocre volumes. The lower traded volumes and almost even market breadth indicate a tentativeness in the undertone. The 4610 / 4360 range advocated for Tuesday was not tested in either direction as the players were relatively quiet after a big upmove yesterday. The coming session is likely to witness a range of 4520 on advances and 4420 on declines.
The market internals indicate a lower turnover as the participation levels fell due to the weakness. The number of trades decreased and the average ticket size was lower, indicating a weak selling bias. The capitalisation of the market was lower in line with a downtick session.
The outlook for the markets on Wednesday is that of cautious optimism, especially since the traded volumes are refusing to improve on uptick sessions. Big ticket exposure should be avoided for now.
The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com
Mandatory disclosure: the analyst has no exposure to any scrip/s recommended above.