Nifty may find support at 5,230 and then at 5,180

The market witnessed a sharp fall today, extending last week’s losses as rising oil prices re-ignited fears of higher inflation. A sell-off in blue-chips by institutional investors also weighed on the market. Both the Sensex and the Nifty closed at their lowest since 2 February 2012 and logged their maximum percentage loss (2.67% on the Sensex and 2.73% on the Nifty) since 22nd September 2011. The fall on the Nifty was sharp with the index closing below its 20-day moving average of 5,385. We may now see the Nifty finding support between 5200-5230, after which there may be small bounce-back. However, if the benchmark continues making a lower low and lower high, we may see it going down to 5,180. The National Stock Exchange (NSE) saw a volume of 86.59 crore shares which is much lower than the 10-day average.

The domestic market opened with small gains on the back of high oil prices and weak cues from its Asian peers. Nymex crude for April delivery was being quoted at $109.54 a barrel in Singapore in early trade while Brent crude for April delivery was at $125.33 a dollar. Concern over Iran’s nuclear programme is putting pressure on oil prices. Back home, the Nifty rose 19 points to resume trade at 5,448 and the Sensex opened at 17,975, a gain of 51 points over its previous close.

The opening figures of the Nifty and Sensex were their intraday highs. The benchmarks soon drifted southwards on a sell-off in blue-chips. Capital goods and banking stocks pushed the benchmarks 1% lower in mid-morning trade.

The market continued its free-fall in the second half of trade as the key European markets were trading in the red on concerns that high oil prices would slow down growth across the globe.

The indices fell to their intraday lows in the last half hour with the Nifty dropping to 5,268 and the Sensex tumbling to 17,382. While the market closed marginally off the lows, it settled lower for the fourth consecutive day. The Nifty lost 148 points to settle at 5,281 and the Sensex dived 478 points to end the day at 17,446.

The advance-decline ratio on the NSE was tilted towards the losers at 260:1536.

The broader indices badly mauled in today’s decline and underperformed the Sensex. The BSE Mid-cap tanked 3.02% and the BSE Mid-cap index tumbled 3.26%.

With the exception of the BSE Fast Moving Consumer Goods index (up 0.29%), all other sectoral gauged settled in the red. The top losers were BSE Realty (down 5.29%); BSE Metal (down 4.86%); BSE Power (down 4.03%); BSE Bankex (down 3.97%) and BSE Capital Goods (down 3.56%).

ITC (up 1.36%) and Sun Pharma (up 0.02%) were the sole gainers on the Sensex today. The key losers were Tata Steel (down 7.03%); Hero MotoCorp (down 6.62%); Hindalco Industries (down 5.35%); DLF (down 5%) and Jindal Steel (down 4.93%).

The Nifty gainers were ITC (up 1.34%); ACC (up 0.17%); Dr Reddy’s (up 0.04%) and Cipla (up 0.03%). Sesa Goa (down 10.15%); SAIL (down 8.55%); Reliance Power (down 8.43%); Reliance Infrastructure (down 8.28%) and IDFC (down 7.49%) were the main losers on the index.

Markets in Asia settled mostly lower on worries that higher oil prices would stifle growth. South Korean finance minister last week said that oil costs would see inflation rising more than 3.2%, estimated for the entire year.

The Hang Seng dropped 0.88%; the Jakarta Composite declined 0.86%; the Nikkei 225 fell 0.49%; the Straits Times tanked 1.05% and the Seoul Composite tumbled 1.42%. On the other hand, the Shanghai Composite gained 0.30%; the KLSE Composite added 0.02% and the Taiwan Weighted rose 0.285. At the time of writing, the key European indices were trading with cuts of 0.62% to 1.09% and the US stock futures were in the negative.

Back home, foreign institutional investors were net buyers of shares totalling Rs8,955.30 crore on Friday while domestic institutional investors were net sellers of shares amounting to Rs836.71 crore.

Bharat Heavy Electricals (BHEL), the country's largest power equipment maker, today said it has secured a Rs774 crore order from oil exploration company ONGC to supply onshore drilling rigs. While the mechanical equipment will be manufactured by BHEL’s Hyderabad plant, electricals like motors will be manufactured by the company’s Bhopal plant. BHEL tanked 4.99% to close at Rs288.65 on the NSE.

Core Education & Technologies, a leading global education solutions provider, has marked its first international foray in higher education, by entering Middle East.

Core is establishing its academic learning centre at Ras Al Khaimah Free Trade Zone (RAK FTZ) in an agreement with Birla Institute of Technology, Ranchi, offering programs in engineering, architecture and business administration. The company also plans to launch an executive MBA programme in this academic year in collaboration with a leading international university at RAK campus. Core gained 0.24% at Rs271 on the NSE.

Infotech Enterprises has entered into a memorandum of understanding (MoU) with Health Awareness Promotion Project India (HAPPI), to create awareness amongst the associates regarding non communicable diseases (NCDs). HAPPI is a voluntary project of the Prevent NCD Foundation consisting of eminent cardiologists, entrepreneurs and fitness management experts. The stock fell 1.02% to close at Rs145 on the NSE.