Market Outlook 11-08-2009

Markets struggled for the third consecutive day as the Monsoon concerns took precedence over everything else. Nifty opened higher in line with the other Asian markets but failed to remain in green for long. Two sectors that have been big beneficiary of the Rural consumption theme, Autos and FMCG were the worst impacted as Monsoon worries led to heavy profit taking in these stocks. Major losses were seen in bajaj Auto, M&M, Colgate, United Spirits, Maruti and HUL. Other major losers were stocks like praj, Ind Hotels, Educomp, ACC, Ambuja, Ultratech, Suzlon, Nagarjuna Constructions, Uniphos, HPCL, Chambal, India info, Voltas, BPCL and Adlabs. IT as a sector managed to buck the trend and most of the gainers belonged to this group. Stocks like Patni, Wipro and TCS hit new highs. Other gainers were Mphasis, Yes Bank, Tulip, Renuka, Polaris and Cummins. Overall, the trend was negative as there were more than 3 losers for each gainer. Nifty failed to sustain above 4480 and lost substantial ground to close just around 4400. Below 4375-4380 we are staring at much deeper cut as sustained trade below 4375 could open up lower targets of even 4150. 4460-4485 would now act as a stiff resistance. Only IT and some Pharma counters remain in the bullish territory while most of the others have exited this territory. Banking counters still remain in a neutral territory. Certain stocks that could move higher in a stable environment are TCS, Patni, Cipla, Tech Mahindra, Aurobindo, Zee, Biocon and Jindal Steel and Power. Nifty has immediate resistance around 4460-80 while below 4370 support is seen around 4300.