Market Outlook 23-10-2009

Market closed in the red for the third consecutive day on negative global cues coupled with some disappointing corporate numbers. JP Associates led the losing stocks as it slid by around 7% on poor quarterly numbers. Even a bonus announcement failed to lift the sentiments. The negative sentiments spread to other infra counters also and stocks like Punj Lloyd, Voltas, IVRCL and LITL attracted selling. Realty stocks were also under pressure and big cuts were seen in DLF, Unitech and other realty counters. Steel counters were also amongst losers. Some buying was seen in certain IT counters as well as some FMCG stocks. Some of the stocks that bucked the overall negative trend were Ashok Leyland, Balrampur Chini, HCL Tech, HUL and Patni. Breadth was negative as there were more than 3 declining counters for each advancing one. Nifty has corrected almost 200 points and is now placed just above the short-term support at 4950-60. It could be just another usual bout of volatility 4-5 days ahead of derivatives expiry caused by shifting of big positions. The band between 4935 and 4960 remains a strong shortterm support and only a close below 4950 would suggest reversal in the ongoing uptrend. Index stocks that are showing some signs of moving higher after a brief correction are ITC, HUL, HDFC and IDFC. Nifty has crucial support around 4935-4960 while resistance is seen around 5040 and then 5080.