MARKET DOWN

 STOCKS CRASH

 The downtrend on the Indian bourses is likely to continue next week, weighed down weakness in the global stock markets. Also, traders will have the January F&O expiry on mind Thursday followed by the RBI policy review on Friday. Furthermore, it will be a short trading week as markets will be shut Tuesday for Republic Day celebrations.

US President Barack Obama’s move to limit the size and trading activities of financial institutions to check risk-taking and prevent another financial crisis saw global markets take a beating Friday. His proposals would ban banks from running proprietary trading operations and sponsoring hedge funds and private equity funds.

The effects were felt back home as equities declined sharply around noon, but the indices recovered smartly after Reliance Industries reported third quarter results which surprised market participants.

India’s largest private refiner posted a 14.5 per cent rise in net profit for the quarter ended Dec 31, 2009. RIL reported a net profit of Rs 4,008 crore, up 14.48 per cent from Rs 3,501 crore in the corresponding period a year ago. Net sales stood at Rs 56,856 crore for the quarter ended on Dec 31, 2009 against Rs 31,563 crore in the same quarter last year. Gross refining margin was at $5.9 per barrel. The company’s Q3 petrochemical revenues rose 17 per cent while Q3 refining revenues soared 143 per cent.

The index heavyweight lifted the Bombay Stock Exchange’s Sensex off lows to end at 16,859.68, down 191.46 points or 1.12 per cent from the previous day’s close. Week on week, the 30-share index lost 694.62 points or 3.96 per cent from 17,554.30 on Jan 15.

National Stock Exchange’s Nifty settled at 5036, down 58.15 points or 1.14 per cent but off the day’s low of 4954.85. The 50-share index lost 216.2 points or 4.11 per cent from the previous week’s close of 5252.20.
   Economic Times dt. 22 Jan 2010

MARKET ANALYSIS BY  EMINENT BROCKING EXPERTS

Market dropped significantly after a disappointing set of numbers from L&T. Other heavyweights 

like ICICI too failed to positively surprise the markets, aggravating the position further. RIL also

saw some unwinding before the results and combination of these factors saw markets declining by 

more than 2%, the first such drop in last two months. Volumes were significantly higher than the 

last 10 days average. Overall breadth too deteriorated as the day progressed as negative sentiments

spread to the small and mid caps. Nifty closed significantly lower than the immediate support levels

of 5160-70 and that has threatened the current up trend again. Immediate reversal above 5200 is 

required to completely thwart this bearish bias but the ferocity (in relative terms as Nifty was going 

nowhere in past 2 weeks) and the magnitude of the fall makes this highly unlikely. Now, Nifty has 

significant support at around 4975 both on weekly as well as daily chart. Violation of this as well as 

drop below 4950 would significantly dent the probability of sustaining almost 9 months old rally. 

As of now probability of Nifty finding support around or above 4970 is high as this may turn out to 

be yet another one and one and a half day kind of correction. So, two significant levels to watch out 

for are 4970-80 on the downside and 5180-5200 on the upside. It is expecting laggards like 

JSPL, HDFC, Maruti, ICICI and SBI to sustain indices at higher levels but apart from Maruti and 

JSPL none of the other heavyweights have shown such tendencies. In fact HDFC has broken below 

the strong support at 2490-2500. Overall, the market seems to be at cross roads and things would 

get clear in a day or two.

Nifty has immediate support around 5050-60 and strong and significant one is seen between 4960-85 while 

resistance is around 5160-75.