Market Outlook 14th July’ 09

Nifty remained below 4000 for the whole day as global markets, particularly the emerging markets continued to trade lower. Indices managed to recover some lost ground towards the close but mid caps and small caps remained severely impacted. In fact, the main indices do not tell the whole story as the most damage was in the non-index items. Of the main sectors, metals (particularly steel) were worst affected. SAIL lost around 9% while JSW steel, Hindalco and Jindal Steel& Power too lost ground. Sterlite was the only one to buck the trend as it gained on announcement of Sterlite Energy IPO. Sugar as a sector also was hit badly as most of the major sugar stocks witnessed sharp sell-off. Prominent losers for the day were Bajaj Hind and Triveni. Amongst others, losers included FSL, Century, Dish TV, GTL Infra, Biocon, NFCL, LITL, JP Hydro, Adlabs, RNRL, Renuka, ICSA, IFCI and Noida Toll. Some of the gainers were Tulip, HCL Tech, Sun Pharma, Axis bank, Infosys, Cairns, Cipla and Financial Tech. Breadth was extremely negative and the volumes continued to drift lower. Nifty found some support around 3920 and recovered to close around 3976. But the recovery was not supported by any leading eavyweights as stocks like Infosys, Cairns and ICICI bank to a lesser extent propped the index. Nifty as well as most of the heavyweights are now in oversold territory and even a small positive factor can spark off a recovery. Even certain momentum mid caps could also see some rebound as most of them have lost substantial ground in past 4-5 trading sessions. Some of that was visible even today in counters like GMR Infra, Punj Lloyd, HCC and HDIL. But overall trend remains down and most of the stocks look to be headed lower in coming weeks. Any rebound would face resistance around 4120 and 4160- 75. On the downside support is seen around 3910 and then around 3840-50.

Everyone has the brain power to make money in stocks. Not everyone has the stomach - Peter Lynch