Though the market has gone down due to Reserve Bank of India (RBI) not listening to Finance Ministry as RBI has kept interest rates unchanged and has given priority to checking inflation over growth.
We are glad that RBI is doing its task properly and is not getting influenced by the finance ministry diktats. It is good that RBI has kept the repo rate unchanged at 8% and CRR at 4.75% as any rate cut could have had worsened. As markets will mature they will start ignoring such liquidity infusions in time as they do nothing for growth in the long term. So, it is our advice to the market participants to stop looking for such short term mood enhancers as now they will start looking for a quarter per cent rate cut in July 2012 policy review. Just remember that every day is a trading day as stock specific opportunities emerge every day which can be capitalised by using the hot stock of the day as it is guaranteed to yield result irrespective of the condition in the market.
Nifty will be in bullish mode only once it crosses 5150 level with volume and this level needs to be kept under watch. The overall breadth was negative as 1,688 stocks declined while 1,001 stocks advanced.
To add fuel to fire we have Global rating agency Fitch lowering India's credit rating outlook, citing corruption, inadequate reforms, high inflation and slow growth. It has revised India
outlook to negative and affirmed the rating of BBB-. This is a post market event and this is likely to have a bearish effect on market in opening itself. Thus for the short term the bullish trend has tanked and bears will control trend in the market. Nifty will face some downward pressure in the near future and can touch 5000 or below levels.
On the positive side globally, we have seen a narrow election victory for Greece's pro-bailout parties, and Germany has indicated that it may be willing to grant Athens more time to meet its fiscal targets to avert a catastrophic euro exit. Have a look at below Euro Zone bond yields in the below snap shot.
The path to Presidential House is clear with Pranab Mukherjee going to win the elections by virtue of Dr Kalam not contesting the elections but Mamata Didi is relentless in her efforts which will be of no use as Dr Kalam would not risk losing the Presidential race as it also leads to a loss of long established rapport.
Support and Resistances for the Day
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Strong future shares at National stock exchange
Pir Health, Ambuja Cement, India Info, Pantaloon R, LT, Jet Airways, Exide Ind, JSW Energy, IGL & ACC.
Weak future stocks at NSE
OnMobile, BEML, Adanient, Orchid Chem, Adani Power, Opto Circuit, Suzlon, Educomp, Praj Ind & Arvind.
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