There seems to be no quick-fix mechanism to pull back a market that has gone into a tailspin. Extending Monday’s losses, equity benchmarks fell to their lowest level in 2008, rattled by fears that RBI may raise interest rates to cool inflation.
However, buying towards the fag end of the trading session by domestic funds and insurance companies saw the market recoup some losses. “Though there was some buying towards the end of the day, the market is still in a nervous mode.
Unlike in previous falls, FIIs are not short covering their positions this time round. Volumes are dropping by the day and there are no leveraged positions anymore. There is absolute lack of investor interest in current market,” said Ajmera Associates director Vikram Bhatt.
According to market talk, a band of operators was seen dumping benchmark heavyweights - HDFC, ICICI, ONGC and Infosys - and short covering Reliance Industries shares in large numbers.
The 30-share Sensex ended 176.8 points or 1% lower at 14,889.25 while the 50-share Nifty closed 51 points or 1.1% lower at 4,449.8 on Tuesday. The post-noon session witnessed the Sensex trading 421 points lower at 14,645.31, falling below this year’s previous low of 14,677.24 reached on March 18. Of 2,699 shares traded on BSE, 964 scrips advanced, 1,667 declined and 68 remained unchanged. Shares worth Rs 68,000 crore changed hands on the bourses on Tuesday.
FIIs net sold shares worth Rs 910 crore. “The recent surge in crude prices has not been factored in the inflation figures released last week. Taking this into account, inflation could be more than 8% this week. This will force the central bank to look at another round of interest rate hikes, which in turn, will further destabilise the market,” Mr Bhatt added.
Yet, SBICap Securities’ head of institutional sales Jignesh Desai has a different view and maintains that concerns on inflation apart, the market is likely to consolidate in and around current levels. “We expect a small correction towards the last trading days of the week, but no big drops thereafter. We could see some rally next week as the market is expecting a series of positive policy announcement and relief packages for sectors like infrastructure and real estate,” Mr Desai added.
A look at the technicals reveals that the Nifty has attempted a rally off the lower boundary of the triangle pattern that has developed since the January lows. “Our preferred view for this market is a retest of the August 2007 lows, around the 4,000 mark. A break below 4,448-4,500 would support this view that a decline towards the August-2007 low was underway. We would be tempted to bargain hunt in the 4,200-4,000 range,” a recent CLSA report said.
Elsewhere in Asia, markets fell the most in three months as widening credit-market losses and the prospect of higher borrowing costs fanned concern earnings will decline. Hang Seng, Nikkei, Strait Times and Seoul Compo ended down 1.1% and 4.2%.
Elsewhere in Asia, markets fell the most in three months as widening credit-market losses and the prospect of higher borrowing costs fanned concern earnings will decline
However, buying towards the fag end of the trading session by domestic funds and insurance companies saw the market recoup some losses. “Though there was some buying towards the end of the day, the market is still in a nervous mode.
Unlike in previous falls, FIIs are not short covering their positions this time round. Volumes are dropping by the day and there are no leveraged positions anymore. There is absolute lack of investor interest in current market,” said Ajmera Associates director Vikram Bhatt.
According to market talk, a band of operators was seen dumping benchmark heavyweights - HDFC, ICICI, ONGC and Infosys - and short covering Reliance Industries shares in large numbers.
The 30-share Sensex ended 176.8 points or 1% lower at 14,889.25 while the 50-share Nifty closed 51 points or 1.1% lower at 4,449.8 on Tuesday. The post-noon session witnessed the Sensex trading 421 points lower at 14,645.31, falling below this year’s previous low of 14,677.24 reached on March 18. Of 2,699 shares traded on BSE, 964 scrips advanced, 1,667 declined and 68 remained unchanged. Shares worth Rs 68,000 crore changed hands on the bourses on Tuesday.
FIIs net sold shares worth Rs 910 crore. “The recent surge in crude prices has not been factored in the inflation figures released last week. Taking this into account, inflation could be more than 8% this week. This will force the central bank to look at another round of interest rate hikes, which in turn, will further destabilise the market,” Mr Bhatt added.
Yet, SBICap Securities’ head of institutional sales Jignesh Desai has a different view and maintains that concerns on inflation apart, the market is likely to consolidate in and around current levels. “We expect a small correction towards the last trading days of the week, but no big drops thereafter. We could see some rally next week as the market is expecting a series of positive policy announcement and relief packages for sectors like infrastructure and real estate,” Mr Desai added.
A look at the technicals reveals that the Nifty has attempted a rally off the lower boundary of the triangle pattern that has developed since the January lows. “Our preferred view for this market is a retest of the August 2007 lows, around the 4,000 mark. A break below 4,448-4,500 would support this view that a decline towards the August-2007 low was underway. We would be tempted to bargain hunt in the 4,200-4,000 range,” a recent CLSA report said.
Elsewhere in Asia, markets fell the most in three months as widening credit-market losses and the prospect of higher borrowing costs fanned concern earnings will decline. Hang Seng, Nikkei, Strait Times and Seoul Compo ended down 1.1% and 4.2%.
Elsewhere in Asia, markets fell the most in three months as widening credit-market losses and the prospect of higher borrowing costs fanned concern earnings will decline
No comments:
Post a Comment