Correction is on, expect support at 17,400

The market trend is down; it will probably move sideways with a downward bias

Markets were volatile throughout the day. They started off on a strong note, but soon pared gains and took a dive. Trading was range-bound for the rest of the day. The trend was downwards. 

The BSE Sensex ended the day 62 points down (0.35%) at 17,527 points; the Nifty ended 13 points down (0.25%) at 5,249.

Most Asian stocks declined on Wednesday amid concerns that a rally that had taken the MSCI Asia Pacific Index to a 10-week high yesterday had overvalued earnings prospects. Key benchmark indices in China, Taiwan, Indonesia, Hong Kong, Japan, South Korea and Singapore were down by 0.44% to 1.11%. China’s central bank said that it would try to keep the growth momentum steady and prevent any financial risk. Stating that the current economic condition was “extremely complicated”, the bank said that it would maintain ample banking liquidity. 

Japan’s export orders were at a six-year high, which is a sign of recovery in the manufacturing market in China. The index for new export orders, a leading indicator of Japanese exports, rose to 55.7 from 55.2 in the previous month, hitting the highest level since May 2004.

European stocks were skidding, as steady oil prices boosted energy stocks, eclipsing a dip in heavyweight mining shares. The key benchmark indices in France, Germany and the UK were all down. All US indices were in the red after poor payroll data, although the US consumer index indicated a healthy consumer confidence in March. The Conference Board's confidence index rose to 52.5, exceeding the median forecast.

Closer home, the government will raise petrol prices by 1.1% from Thursday in major cities that will migrate to Euro IV complaint fuel to help oil firms to recover the investment made for plant up-gradation. Diesel prices in leading cities including Mumbai would be hiked by Rs 0.26 a litre, while in Delhi it will rise by more than Rs2 because of taxes.

Indian exports are expected to rise by 15%-20% in the next year, said the trade minister. Foreign institutional investors was net purchasers of Rs579 crore and domestic institutional investors bought stocks worth Rs100 crore yesterday. The rupee was higher in afternoon trading.

Among stocks, Alok Industries (down 0.22%) will spend Rs300 crore in capacity expansion in 2010-11. The company, which produces polyester yarn, plans to double yarn capacity to 1,200 tonnes a day. Godrej Properties (up 2.6%) has entered into agreements to transfer 49% stake in unit Godrej Sea View Properties to HDFC PMS for Rs55 crore. L&T (down 0.8%) has secured orders aggregating Rs1,126 crore from various customers like Sterlite Industries India, Hindalco Industries, Tata Steel, Delhi Jal Board and Uttar Pradesh Jal Nigam Limited. IT stocks extended recent losses triggered by a recent rally of the rupee against the dollar. India's largest software services exporter by sales Tata Consultancy Services (TCS) fell 2.4%, extending the preceding three days' losses. Ahluwalia Contracts (India) was up 4.3% after the company won orders worth Rs425 crore for civil and structural construction.

The market trend is down. It will probably move sideways with a downward bias and find support at 17,400.

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