Nifty has to breach 5,170 or 5275 to set a direction

Selling pressure, which increased in the second half of trade, and weak global cues led the market lower today. Yesterday we had mentioned that we may see the Nifty moving sideways in a narrow range of 5,185 and 5,275. Today the index was capped in this range. At present the index is in a “no direction” phase. An uptrend may be seen if the benchmark manages to close above the previous day’s high. However, the downside bias may continue if the index closes below 5,170. The National Stock Exchange (NSE) saw a volume of 69.09 crore shares, which was below its 10 day moving average.

Unsupportive global cues caused the domestic market to open lower, after registering gains of over 1% yesterday. US stocks, which settled lower overnight on weak economic data, also led the Asian pack down in morning trade. Back home, the Nifty started trade at 5,232, down 11 points from its previous close and the Sensex was down 23 points at 17,234.

The market drifted lower after the opening bell as stocks of consumer durables, banking, realty and metals were under pressure in early trade. However, select buying, which began at around 10.00am, pushed the market higher. Despite being in the negative, the upmove enabled the indices hit their intraday highs in mid-morning trade. At the highs, the Nifty rose to 5,237 and the Sensex moved up to 17,246.

However, intense selling pressure in sectors like consumer durables, realty and banking pushed the market further southwards in post-noon trade. The benchmarks fell to their day’s lows at around 3.00pm as the European indices, which opened mixed, were trading in the red. At the lows, the Nifty went down to 5,169 and the Sensex dropped to 17,040.

A minor recovery in the last half hour ensured the market close above those levels. At the close, the Nifty fell by 48 points to 5,195 and the Sensex settled 136 points lower at 17,122.

The advance-decline ratio on the NSE was 475:1411.

Among the broader indices, the BSE Mid-cap index declined 0.87% and the BSE Small-cap index dropped 1.08%.

BSE Fast Moving Consumer Goods (up 0.29%) and BSE Healthcare (up 0.22%) settled while the other 11 sectoral indices were in the red. BSE Consumer Durables (down 3.32%); BSE Bankex (down 1.73%); BSE PSU (down 1.58%); BSE Realty (down 1.57%) and BSE Oil & Gas (down 1.23%) were the top losers.

Tata Steel (up 2.02%); Maruti Suzuki (up 0.98%); Wipro (up 0.69%); ITC (up 0.53%) and Larsen & Toubro (up 0.36%) topped the Sensex list while Hindalco Industries, ONGC (down 2.75% each); Sterlite Industries (down 2.32%), State Bank of India (down 2.28%) and ICICI Bank (down 1.93%) settled at the bottom.

The key winners on the Nifty were Tata Steel (up 2.01%); Dr Reddy’s (up 1.55%); Ranbaxy (up 1.34%); Siemens (up 1.21%) and Maruti Suzuki (up 1.14%). The major losers were Jaiprakash Associates (down 5.29%); Cairn India (down 4.24%); Reliance Power (down 3.79%); Kotak Mahindra Bank (down 3.72%) and Reliance Communications (down 3.38%).

Markets in Asia settled mostly lower on fresh debt concerns and a report from Societe Generale SA which indicated lower earnings growth in China. OECD Secretary-General Angel Gurría on Tuesday said that Europe’s problems remain challenging as austerity measures and a dour financial situation is impacting short-term growth.

The Shanghai Composite tumbled 2.65%; the Hang Seng declined 0.79%; KLSE Composite fell by 0.27%; the Nikkei 225 dropped 0.71%; the Straits Times shed 0.10% and the Seoul Composite was down 0.39%. On the other hand, the Jakarta Composite gained 0.27% and the Taiwan Weighted rose 0.11%. At the time of writing, two of the three key European indices were in the negative while the US stocks futures were trading higher.

Back home, foreign institutional investors were net buyers of shares amounting to Rs42.99 crore on Tuesday while domestic institutional investors were net sellers of equities totalling Rs290.05 crore.

Infrastructure and construction major Gayatri Projects today said it has raised Rs144 crore through a rights issue of shares. The rights issue, which was open for subscription from 5th March till 19th March, has been fully subscribed. The stock closed 3.67% down at Rs115.50 on the NSE.

Pharma major Panacea Biotec today said it is scaling up production of anti-cancer products with the commissioning of its new facility at Baddi in Himachal Pradesh, set up at an investment of Rs55 crore. The new manufacturing facility that started production from today will have an annual production capacity of around 1.2 million vials. The stock 1.47% closed lower at Rs67.25 on the NSE.

Mahindra Ugine Steel said on Wednesday that its board has approved sale 65 acres of land at its stampings unit at Kanhe, in Pune district of Maharashtra. “The current valuation indicates a value of around Rs89 crore for the said piece of land,” the company said in a filing to the BSE. The stock gained 1.74% to close at Rs52.50 on the NSE.