Sensex falls below 16,000 to 3-month low

Sensex falls below 16,000 to 3-month low

MUMBAI: India's main stock index Sensex fell below 16,000 points for the first time in more than three months on rising foreign fund outflow as Europe's debt woes hit risk appetite.

At 2:41 p.m., the 30-share BSE index was down 2.9 percent at 15,994.12 points, with all of its components falling.

At 2:38 pm, National Stock Exchange's Nifty was at 4797.05, down 146.90 points or 2.97 per cent. The index touched a low of 4795.15 and high of 4946.60 in trade so far.

It had last been below 16,000 on Feb. 11. The 50-share NSE index was down 3 percent at 4,796.50.

BSE Midcap Index was down 2.96 per cent and BSE Smallcap Index moved 3.12 per cent lower.

Amongst the sectoral indices, BSE Metal Index fell 4.84 per cent, BSE Capital Goods Index declined 2.98 per cent and BSE Auto Index fell 2.95 per cent.

Reliance Communications (-6.32%), SAIL (-6.22%), Hindalco (-6.15%), Ambuja Cements (-5.49%) and IDFC (-5.22%) were amongst the top Nifty losers.

Sun Pharma (2.09%) was the only gainer.

Market breadth was negative on the NSE with 2430 losers against 508 gainers.

European markets continued to witness pain over debt-crisis issue plaguing Europe. DAX fell 2.45 per cent, CAC 40 was down 2.88 per cent and FTSE 100 declined 2.27 per cent.

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Src: ET and Moneycontrol.com

Back to the Bearish Ways

The markets are likely to open with a downward bias on continued international weakness. The US markets tumbled Monday with the Dow giving up all but 5 points of gains registered Friday during a fury of short covering on the options expiry.

After trading in a narrow range for much of the day, the Dow Jones Industrial Average tumbled 127 points, the S&P 500 lost 14 points to 1074 and the NASDAQ shed 15 points at 2214.

The late swoon indicated those investors’ fears about Europe's credit crisis and tighter rules on Wall Street are still running strong. Financials led the decline on a day when the street refused to take cognizance of the 7.6% rise in existing home sales.

The euro was under pressure during the session as the market weighed news that the Bank of Spain bailed out a regional savings bank. The 1.1% rise in Dollar Index, however, did not prevent the Crude and Gold futures to move higher 17 cents and $ 17.90 higher respectively.

The bullish fervour seen in the morning trades in our markets could not hold for the day as bears came back in the afternoon to snatch the initiative away from the nascent bulls. The Nifty managed to cling on to just 13 points of gains, from the 98 points seen at one point.

Barring Reliance Infra, which saw some additional position build up, the rest of the clan saw positions being pruned as investors took advantage of the god sent rally to prune positions.

Our stated view was also the same.

Expect the Nifty to take support around the 4850 level. If the 4832 level breaks, it will not augur well and we could see a cascade of selling by risk managers in that eventuality.

Autos, banks, metals, realty still look weak. As the settlement draws near, the options are becoming cheap and times match the stop loss of a trader. Switching to options during the last two days of the settlement is protective and also gives you more bangs for the buck. Ask your RM to understand how you can hedge your portfolio or use options to trade.

Technical Picks – Stocks

Recommended Action for Alstom Projects is Buy and for Pantaloon Retail Futures is Short on rises

Weekly Market, Sectoral and Stock Perspective – Technicals

Markets resumed their intermediate downtrend as they slided lower this week.


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Src: Economictimes.indiatimes, HDFCSEc, DP blog and etc