Market Scenario 21/08/12

The markets closed with moderate gains during the week, all sectoral indices closed in the positive except power and metal stocks. The top Nifty gainers during the week were Ranbaxy and RIL while the biggest losers included Hindalco, BPCL and Ambuja Cements. In fact, Reliance Industries and IDFC were the star performers during the week. Interestingly, the Reliance counter came out of long hibernation recently.

On Friday last, the markets lost all the gains of morning session and closed flat at the end. FMCG, IT, auto and consumer durables were the top gainers while realty, power and metal tried to drag the indices down. The top Nifty gainers on Friday were Tata Motors and Wipro while the biggest losers included Jindal Steel, Tata Power and Hindalco.

A few Hyderabad based companies came out with results. Visaka Industries declared highly encouraging results. However, owing to pledged shares, the counter did not advance further. Other cement companies like Deccan Cements, Sagar Cements and Kakatiya Cements have declared results which were below market expectations. Interestingly, all these three companies are quoting much below their book value.

The markets initially showed strength. But subsequently gave way to bearish sentiment following CAGs report on Coal Block dealings. The bullish undertone was replaced with bearish sentiment at the closing of the session on Friday. Buy on declines should be the strategy. The market bias is on the upside.

It would be advisable to watch the global cues, crude oil prices and the rupee-dollar fluctuations. Because, the future course of markets depend on these indicators. Another factor to be watched is the progress of monsoon which as per current indicators is deficient. In the current scenario, it is advisable to wait and watch before taking a decisive action. The keyword would be to trade light and trade smart.

Technical Analysis: The Sensex closed at 17691, recording a gain of 34 points from its previous close, and the Nifty closed at 5366, a nominal gain of 3 points. On the higher side 5400 and 5450 are the strong resistance levels while on the lower side 5350 and 5300 are the strong support levels.

Suggested Strategy: The markets initially showed strength. But subsequently gave way to bearish sentiment following CAGs report on Coal Block dealings. The bullish undertone was replaced with bearish sentiment at the closing of the session on Friday. Buy on declines should be the strategy. The market bias is on the upside.