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Nifty might find support at 4350-60

This article was posted on Jun 16, 2009 and is filed under Market Outlook

With the NSE Nifty index shutting shop below the 4500 levels, the index might find support at around 4350-4360 levels in the coming days.

It was the third straight trading session of losses for the Indian markets on Monday. The slide was led by weak global cues coupled with heavy selling in the index heavyweights like Reliance Industries. The Sensex slipped 362 points or 2.3% to end at 14,875 after touching a high of 15,261 and a low of 14,807. The index had opened at 15,196 against the previous close of 15,238.

All round selling also saw the NSE Nifty to close below 4,500 the crucial technical level where the index had taken support previously.

The NSE Nifty slipped 99 points or 1.5% to shut shop at 4,484.

Among the BSE Sectoral indices BSE Oil & Gas index was the top loser slipping 4.4%, followed by the BSE Metal index down 3.6%, BSE Capital Goods index down 3.1%, BSE Realty index down 2.6% and BSE Auto index down 2.3%.

Even the BSE Mid-Cap index was down 2% and BSE Small-Cap index was down 2%. However, bucking the negative trend were, BSE FMCG and BSE Bankex index. Both advanced 1% and 0.5% respectively.

Shares of RNRL shot up over 24% to shut shop at Rs108 after the Bombay high court announced the judgment in favour of the company in the RIL-RNRL gas supply agreement dispute.

The stock hit an intra-day high of 112.2 and an intra-day low of Rs86.85. Total traded quantity on the BSE exceeded over 10mn shares.

Other ADAG stocks were also in momentum, scrips like Reliance Power surged 4.5% and Reliance Infrastructure gained 1.3%.

On the other hand, shares of Reliance Industries declined by over 7.5% to end at Rs2180. The stock saw heavy selling on the bourses post the high court decision over the RIL-RNRL case. The total traded quantity exceeded nearly 2.1mn shares on the BSE.

Shares of Yes Bank gained by half a percent to Rs129 after reports stated that the company plans to raise US$400nm by means of equity through a follow-on public offer, and debt. The scrip touched an intra-day high of Rs133 and a low of Rs127 and recorded volumes of over 1.1mn shares on BSE.

Shares of SCI ended flat at Rs127. According to reports, the company plan to revive a proposed joint venture with ONGC for services related to vessel operations.

Shares of Gail declined by 1.5% to Rs282. The company Q4 net income fell 13% to Rs6.3bn in the three months ended March 31. The scrip touched an intra-day high of Rs288 and a low of Rs277 and recorded volumes of over 0.3mn shares on BSE.

Shares of Indian Hotels erased early gains and slipped sharply by 5% to end at Rs71.6. The stock had hit an intra-day high of Rs79.59 after the company announced that it acquired control of Hotel Sea Rock in north Mumbai for 6.8 billion rupees, to boost the rooms it can offer travelers to the country’s commercial hub.

The company announced that its profit for the year ended March 31, 2009, declined to Rs124.5mn from Rs3.55bn a year earlier.

With the NSE Nifty index shutting shop below the 4500 levels, the index might find support at around 4350-4360 levels in the coming days. The bulls have been doing a lot of running since early March. In fact, they may have come too far too fast. This increases the chance of fatigue which is visible in the last few trading sessions. However, after witnessing such a selloff one cannot ruleout a rebound.

source: Indiainfoline

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