Markets on 25 Nov 10 - Midcap Stocks Have No Takers

Markets opened on a slightly positive note, rallied a bit, managed to remain steady till afternoon but later it gave way as the selling pressure of the expiry day was very heavy. Among the banking stocks PNB , Axis Bank and Bank of India were the big losers. LIC Housing Finance which was the big loser yesterday opened on a negative note and made a low of Rs.945 but managed to buck the trend and rallied smartly to an intraday high of Rs.1113.50 and finally closed at Rs.1053.80 with very minor losses. Infosys, HDFC Bank, Bajaj Auto, TCS, Hero Honda and HDFC were the major gainers and it was primarily Infosys and Bharti which helped the index close around 5800 levels. 
 

The biggest casualty was in the midcap stocks where there were no buyers and as a result the breadth was extremely poor. We are of the view that the corporate loan scandal to a very large extent has been discounted as market feels that this is not a systematic failure. The massive fall in the market to a very large extent can be attributed to the expiry of the derivative segment where rollover did not take place because of lack of confidence in the uptrend.

 

Other stocks which managed to buck the trend were Lupin, Indusind Bank, Bata India, Ultratech Cement, ACC and GE Shipping. These are the stocks which should be bought if the market remains steady tomorrow.

Nifty will face strong support at 5785 and 5750 and will face strong resistance around 5840 and 5885 levels.