Markets succumbed to the nervous sentiments as Nifty slipped below 5900 during the session. Nervousness was aided by the reports that IB has submitted reports of price rigging in few companies. So, there was sharp sell-off seen in some of these scrips like KS Oils, IRB Infra and Ruchi Soya. Mid and small caps were hurt the most as stocks plummeted due to lack of buying rather than any other particular reason. Amongst the large caps, banking remained under pressure and list of prominent losers was crowded with many banking names. Bank Nifty shed another 2% as it closed almost on a 3 months low. OMCs were up on reports that petrol prices might be raised as Crude moved above $90. There were some other gainers like Hexaware, Ranbaxy and ACC but overall the sentiments were extremely negative and there were much more losers than gainers. Some of the major losers were Ruchi Soya, KS Oils, Renuka, IRB, KFA, ABG Ship, Al bank, Union bank, Jain Irrigations, Orchid, Axis, Bajaj Hind and BGR Energy.
Nifty failed to sustain above 5940 but found some intraday support around 5880. But, the short term trend again has shifted into negative and would remain so as long as we trade below 5950. On the downside, levels of 5835-45 and then 5770 are possible. Banks are not showing any signs yet of bottoming out and could continue to bother indices in coming days. IT and metals to lesser extent are showing some signs of stability. Short term sentiments are being affected by all kind probes be it market related (Mkt operators, price rigging) or Government agencies related (2G Scam etc). It would be advisable to stay away till some sanity and stability returns. Few stocks that have been hammered because of short term events but hold investment values could be bought in small quantities with medium to long term investment horizon. (9-12 months). Some names that could be considered are IRB Infra, Welspun Guj and HCC.
Nifty has support around 5835-40 and then around 5770 while resistance is likely around 5960-70.
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