The Sensex boomeranged after hitting a high of 15,107 early in the week. The markets began the week with a bang on the back of Indo-US nuclear deal but ended on a whimper despite lower inflation and higher IIP numbers.
The index retraced sharply from the resistance zone of 15,100-15,170, and tumbled towards the weekly support level of 13,970. The index touched an intra-week low of 13,934, and finally settled with a loss of 483 points at 14,001.
Metal, realty and energy stocks were the major losers last week, while cement and FMCG stocks were able to attract buyers. Sterlite nose-dived over 17 per cent, mainly on account of the company’s restructuring plan, to Rs 487. Reliance Infrastructure, Tata Power, RIL, Tata Steel, Jaiprakash Associates, DLF, Mahindra & Mahindra and ICICI Bank dropped by 5-8 per cent each. Maruti, Hindustan Unilever, Grasim and ACC, on the other hand, ended with marginal gains.
The Sensex is now getting closer to the lower band of support mentioned for this month, that is 13,350-13,500. On can expect considerable buying support at these levels, and possibly a bounce back, too.
The NSE Nifty moved in a range of over 350 points - from a high of 4,558, to a low of 4,200 - before settling with a loss of 124 points at 4,228.
The strong support base for the Nifty at 4,050 to 4,080 could come into play this week. If the index is able to maintain this support zone, one is likely to witness the index’s bounce back to atleast 4,370 to 4,450.
