MUMBAI: The Indian equity market opened on a subdued and moved in a narrow range on the day of August Derivative series expiry as global markets struggled for direction.

However, major action was witnessed in select counters from the small-cap and mid-cap space as they tried to catch-up with their larger counterparts which can be attributed to their under-performance in recent times. The inverse was true for some of the frontline majors which faced strong selling pressure at higher levels.

Resultantly stocks from the consumer durables, capital goods and pharma space managed to garner investors’ interest, while those from the Metals, Realty and Banking bore the brunt of profit booking.

IT stocks rose as the top-three Indian vendors namely Infosys, TCS and Wipro along with IBM Corp bagged a slice of $1.5 billion five year IT outsourcing contract from British Petroleum (BP). However the sudden bullishness of investors with regards to IT stocks also increases the inherent risk of sharp profit taking therein that seems overdue.

Overall, volatility ruled the roost as traders rolled over positions in the derivatives segment to the September 2009 series. However, the visible trend that emerged during intra day trading was the strong resistance above the 4700 points level on the Nifty and 15850 point level on the Sensex.

Though the near term trend will be influenced by the fund flows and of course global cues, a critical fallout could come from increasing number of drought affected regions and inflation that seems to be taking a U-turn despite a high base effect. Hence, watchout for sharp profit booking at counters that seem to have run up very sharply in the mid-cap and small-cap space.

[ Report compiled by Garima Kumar, ED, Lotus Knowlwealth and powered by www.theipoguru.com ]

Disclaimer: This document has been prepared and issued on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst meticulous care has been taken to ensure that the facts stated are accurate and opinions given are fair and reasonable, neither the analyst nor any employee of our company is in any way responsible for its contents. The company may trade in investments which are the subject of this document or in related investments and may have acted upon or used the information contained in this document or the research or the analysis on which it is based, before its publication.

source: UTVI

Tags: call and puts, future and option tips nse, hot stocks, nifty tips, profit booking in nse, stocks in news

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