Nifty failed to make any headway beyond 5750 and despite some positive cues from overseas markets as well as gapped up opening, Nifty succumbed to selling at higher levels to slip below 5700. Broad market was positive but Nifty was affected negatively by selling in key heavyweights like RIL, SBI and Infosys. Metal stocks were positive and buying was seen in stocks like Tata Steel, Hindalco, SAIL, Sterlite, Ispat and JSW Steel. HCL Tech surprised the markets positively and was one of the leading gainer for the day. Some of the mid cap banking counters moved higher on account of some short covering as did some Realty counters. So, in the gainers list we had stocks like Can Bank, LIC Hsg, Yes Bank, OBC, Dena Bank, Andhra Bank, DLF and Sobha.
Nifty faltered around 5740-5750 as key heavyweights witnessed selling. It seems that Nifty is trying to stabilize around 5650-5700 but broadly the momentum would remain with the sellers as long as Nifty remains below 5750. Heavyweights are showing divergent trends and that is keeping Nifty in check. Short covering bout could continue to lift some mid cap banking counters and some more upside is likely in stocks like Dena Bank, Andhra Bank, Allahabad Bank and the likes. But still it would be too early to call a bottom in these counters. We continue to believe that bottoms would first be visible in bigger banking counters like SBI, ICICI, Axis and HDFC Bank. Hindlaco and Sterlite have seen good moves in last two sessions and both are approaching significant resistance at 240-42 and 186-89 respectively. Sesa Goa could see more upside if it manages to move past 328.
Nifty has immediate support around 5650 and then around 5610 while resistance is at 5740-50.
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