It was a tough day for bulls as market headed southwards after being in a sideways mode for past few sessions. It was a slow grind mid session but the downward momentum picked up in the last 60 minutes as Nifty decisively slipped below 6250. All round selling accounted for weakness in Nifty that fell to as low as 6180 during the day. DLF lost over 4% while other significant Nifty losers were JP Associates, Cipla, Bharti, Bhel, TCS, Tata Motors, RIL, HDFC, Wipro and HDFC bank. As the list suggests all major sectors were affected by the negative sentiments. These sentiments were probably triggered by huge selling by FIIs in Korean market. Standout stock of the day was RPower that powered its way almost 10% higher on huge volumes. Company has managed to get international financing at extremely reasonable interest rate. Then there were stocks like Lupin, Indusind Bank and LIC hsg that reacted positively to inclusion in MSCI. Some other gainers were Bata India, ICSA, Hindalco, Syndicate Bank, Uco Bank, Tata Power, DCB and Reliance Infra. Mid caps too cracked in the later stages and shed significant weight.
Nifty did breakout of the range of past few sessions but the direction was not as per our expectations and analysis. Nifty broke down below 6240 and in fact almost reached the targets for this breakdown during the day itself. The technical targets for range breakout was about 70-75 nifty points (around 6170). Now, the 6145-6170 band assumes a lot of significance for Nifty as the current breakout occurred above 6150. While an intra-session breach of 6140 cant be ruled out completely, inability to sustain and close above 6150 could put the current leg of rally in serious doubt. We believe that for markets to scale new highs stocks like RIL, HUL, Tata Steel and ICICI would have to assume leadership. RIL has strong short term support at 1065-70 while HUL sees a significant breakout beyond 315.
Nifty has support crucial support around 6150-70 while resistance would be seen around 6250-60 and then around 6310.
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