Best weekly rally- a boon ??

The bottoms are intact for now despite of the global negative news. The strength of Nifty is now better than a week ago and the whole scenario is changed the technicals for now as good bottom support is at 5400 and the 5500 is a good support where bulls can take advantage of buying again on average cost. The strength gained can be even extended upto 5440 level. So the Bears have to wait for a longer period than anticipated for yearly low cuts of Nifty and its major supporting stocks.

The Bears can say thanks to the rising crude prices, Libya crisis and the Fukushima nuclear crisis. As a matter of fact now the Japan nuclear crisis is more of an environmental concern than of economic concern. The economic impact of the Tsunami can be seen after 15^th April, so that the testing time to japans ability to face and come out of this grave crisis is tested against the burgeoning power crisis and the exhausted inventory of the industry. The devastation effect was on the infrastructure especially power crisis. This is seen as immediate impact on the Japan’s automobile industry and their ancillary.

In India the growth indicators are now favouring the Bulls but the future is looking bleak as the inflation is stubborn to yield below 8% and the Govt spending likely to be eased. The political situation is becoming fluid and the populist support to Congress is decreasing due to scams and the gratification charges. The Central govt is not strong to make any big policy changes that can add value to markets other than the GST, banking amendment bill. The serious concern is now on the survival of the Manmohan Singh ability as PM to lead a Govt. with little damage to populist measures initiated and the corruption charges being faced.

Why Fall?????

China, Ireland knock Sensex off 20k perch

BS Reporter / Mumbai November 17, 2010, 0:06 IST

Indian shares slid on Tuesday, along with most global peers, on concerns that China may further tighten monetary policy to curb inflation and that Ireland is in talks with the European Union and IMF for a bailout. A rate hike in South Korea also dampened sentiment in the Asian region.

The sell-off resulted in the Sensex and Nifty closing well below their psychological levels of 20,000 and 6,000, respectively. The Bombay Stock Exchange (BSE) Sensex shed 2.19 per cent, or 444.55 points, to close at 19,865.14. Earlier, the index opened at 20,371.73 and touched a high of 20,380.10 in early morning trades. The National Stock Exchange (NSE) Nifty lost 2.20 per cent, or 132.90 points, to end at 5,988.70.

“The situation in Ireland has raised concerns that many other countries in Europe may find it difficult to meet their debt commitments,” said Anagram Capital CEO Mayank Shah. The cost of insuring against debt default in other European countries like Portugal and Greece has also increased.

According to a Bank of America (BofA) Merrill Lynch November survey of fund managers, more than a third of global investors have identified EU sovereign funding as their key risk. “It’s possible that the year-end rally has already happened, leaving investors vulnerable to event risks, such as a deepening European sovereign debt crisis or a dollar rally,” said Michael Hartnett, chief global equity strategist at BofA Merrill Lynch Global Research.

On Tuesday, all the Sensex stocks except Bharti Airtel ended in the red. Sterlite Industries (down 5.40 per cent to Rs 172.60), Hindalco (down 5.21 per cent to Rs 212.05) and Jaiprakash Associates (down 4.57 per cent to Rs 122.20) were the major losers.

The market breadth was deeply negative, with more than four stocks declining for every one that advanced on the BSE. The BSE Midcap and the BSE Smallcap indices fell 2.15 per cent and 2.92 per cent, respectively. All the sectoral indices on Asia’s oldest bourse

Realty and metal indices suffered the most, with a fall of more than 3 per cent each. According to provisional figures on the NSE website, foreign institutional investors net sold Indian shares worth Rs 196.69 crore on the cash market, while domestic institutions were buyers to the tune of Rs 449.59 crore.

Among other Asian markets, the Shanghai Composite lost 3.98 per cent, Tokyo’s Nikkei declined 0.31 per cent, Hong Kong’s Hang Seng slipped 1.39 per cent and Seoul’s Kospi dropped 0.77 per cent. At the time of going to press, major European markets were trading 1.3-2.0% lower. Wall Street also opened lower, with the Dow, S&P 500 and Nasdaq around 1.3% off on morning trades.

Thanks to Business Standard.

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