After a sharp 1200 points rally in the Sensex, Indian markets seem to be consolidating today and have opened flat. As the RBI declined to cut interest rates despite the government’s latest effort, traders will now be eyeing the inflation data, as the apex bank has once again raised concern about the inflation.
“Nifty will face strong resistance at 5630 and 5700, a correction could be anticipated. The next support is placed at 5525,” said Cholamandalam Securities today. The brokerage added that Nifty has been on a sharp rally from 5200 to 5600 levels. “We believe the market is likely to take breather at the current levels.”
Meanwhile Fitch ratings has said India’s reforms at first glance appear credit positive. But there is still considerable execution risk given the Congress-led coalition’s divisions and recent track record of policy reversals. Even rating agencies Moody’s and Standard and Poor’s are wary about the implementation of these new measures
The BSE Sensex was trading at 18,523, down 18 points and the NSE Nifty was quoting at 5,606, down 3 points over the previous close. The BSE Small-Cap index was trading down 0.01%, while BSE Mid- Cap index was trading flat.
Infosys, BHEL, NTPC, Bharti Airtel, Maruti Suzuki, NTPC, Tata Power, Bajaj Auto, HDFC Bank, M&M, ONGC,Dr Reddys Lab are among gainers in BSE Sensex and Nifty.
RIL, Wipro, TCS, ICICI Bank, Sun Pharma, Tata Steel are among losers in Sensex and Nifty,
Tech Mahindra gained over 2% as it is going to buy 51% in Comviva Technologies for Rs 260 crore (Comviva is Bharti group company). Mahindra Satyam was up 2% too.
Kingfisher Airlines rallied another 4% and WWIL gained 5% after FDIs approvals.
Real Estate companies are up as the commercial banks have been asked to focus on funding partially completed realty projects on a priority basis and developing projects in small towns.Unitech is up 1.3 percent, HDIL jumps 2.9 percent.
The steel stocks too may remain buzzing on report that steel imports continued to surge amid weak demand and rise in domestic output.
Finance Minister P Chidambaram has ruled out any rollback and affirms that the government faces no threat. He has hinted at more measures to boost economy coming in from the Department of Revenue, Disinvestment and SEBI. He played down rating worries saying Government policies are not to get rating by credit rating agencies.
Globally, Asian shares fell from four-month highs. Investors are keenly watching if Spain will request a bailout. US indices closed in the red.
FII inflow continue. Net foreign institutional investor investment into Indian stocks has been $13.6bn and the past two days have seen FIIs bring in around $1 billion.