The Markets on 18 Nov 10 - Volatile Nifty

Nifty was extremely volatile as market and stocks reacted to a host of rumors floating around in the marketplace. It was a slightly bullish opening as Nifty opened well above 6000 but swung wildly as the day progressed. 2G spectrum scam dominated the proceedings as did the banking exposure to MFIs. Both hit the banking stocks negatively as Bank Nifty plunged over 3% at one point of time. Nifty too made a new recent low at 5906 before staging a smart comeback mainly on buoyant global cues. But broadly, domestic events took a centre stage and most of them were negative. Rumors that PM is stepping down aided to the nervousness. Banks were the worst hit as heavyweights like ICICI, Axis, SBI and HDFC Bank witnessed selling. Volumes were heavy in most banking stocks. However, on the positive side metal stocks turned positive mostly on positive global cues. So, strong buying was witnessed throughout the session in stocks like Hindalco, Tata Steel, JSW Steel and Sterlite. Pharma stocks too were active on the positive side as buying was seen in Cipla, Lupin and other pharma counters. Some of the other prominent gainers were Bata, Hero Honda, Bhushan, TVS Motors, GMDC, Jet Airways, Bharti, IOB, Auro Pharma and Ashok Leyland. RCom was the main loser amongst the derivative stocks and despite recovering almost 50% of its intraday losses ended the day around 5% lower. Some other losers included Ruchi Soya, Noida Toll, Unitech, Reliance Cap, Escorts, Rolta, Syndicate Bank, ABG Ship and Indusind.
 

Nifty broadly followed the scenario given yesterday. Only point missing that could have convincingly tilted the balance in favor of bulls is the fact that Nifty couldn’t move past 6000. Sustained trades above 6040 could firmly tilt the balance and one should start building fresh positions again in strong counters. Going by the session’s behavior it looks that stocks like IDBI, Tata Steel, Auto stocks, Cipla, Hindalco, Sesa Goa( keep a stop below 325), Jet Airways, KFA, JP( Stop loss below 116), Voltas and Crompton, to name a few are showing good interest at lower levels.

Nifty has support around 5940-50 and then around 5870 while resistance is likely around 6050.