A lower low may take the Nifty further down to 5,320

The market extended its losses for the second straight day on the political impasse in Delhi and selling in banking, capital goods and technology sectors. On Friday we had mentioned that the upmove on the bourses has stalled. Today the Nifty managed to make a similar intraday high as seen on Friday, but it made a lower low and ended in the negative. From here we may see the index moving sideways, and a lower low may take the index further down to its first support at 5,325. The National Stock Exchange (NSE) saw a lower volume of 49.89 crore shares while the advance decline was a poor 513:1159.

The market witnessed a flat opening as the markets in Asia were down in morning trade as hopes of fresh initiatives from policymakers to revive economies around the world failed to enthuse investors. Back home, indications of the stand-off in the Parliament continuing for the second week, kept local investors edgy.

The Nifty opened just one point higher at 5,388 while the Sensex started off at 17,769, down 14 points from its previous close. Select buying soon pushed the indices to the day’s high in initial trade. At the high, the Nifty rose to 5,399 and the Sensex went up to 17,820.

The market soon came off the highs following selling pressure from banking, technology, metal and capital goods stocks. Choppy trade and absence of any domestic triggers kept the market in the negative in subsequent trade.

The benchmarks slipped further southwards in noon trade as the European markets opened lower on profit taking after recent gains while the UK markets were closed on account of a holiday.

The market fell to its lows in the last half hour on selling in banking, realty and power stocks. At its lows, the Nifty went down to 5,347 and the Sensex dropped to 17,662.

The market closed near the lows of the day, extending its losses into the second day in a row. The Nifty settled 36 points (0.68%) down at 5,350 and the Sensex finished at 17,679, a cut of 104 points (0.59%).

Markets in Asia settled mostly lower as hopes declined about Chinese authorities easing policies for reviving growth.

The Shanghai Composite tumbled 1.74%; the Hang Seng declined 0.41%; the KLSE Composite shed 0.01%; the Straits Times fell 0.20%; the Seoul Composite slipped 0.10% and the Taiwan Weighted was down 0.12%. Bucking the trend, the Jakarta Composite added 0.01% and the Nikkei 225 rose 0.02%.

At the time of writing, recovering from their opening lows, the CAC 40 of France was up 0.23% and the DAX of Germany was trading 0.22% up. UK’s FTSE 100 was closed for a local holiday. Simultaneously, the US stock futures were trading in the positive.

Back home, foreign institutional investors were net buyers of equities totalling Rs226.06 crore on Friday, whereas domestic institutional investors were net sellers of stocks amounting to Rs356.68 crore.