Outlook (Friday) : Small recovery likely today
European markets also tumbled last night as Asia had done earlier, while the US indices made a small loss. Most Asian markets have recovered this morning, but with a small gain. The Nikkei has made a stronger move, reflecting its high volatility.
Our market tumbled yesterday, but is likely to recover somewhat today, as is the trend in most Asian markets this morning.
The market declined on Thursday, with the sensex down 387.91 points (1.93%) at 19,674.33, the nifty 127.45 points (2.09%) at 5,967.05, and the CNX Midcap 164.80 points (2.07%) at 7,802.05. The largest negative contributions to the sensex were from Reliance Industries (67.6 points), Larsen & Toubro (63.5), State Bank (58.8) and ICICI Bank (49.2). The biggest positive contribution was 8.5 points from HDFC.
The market's breadth was negative, with 2.86 times as many declines as advances on the BSE, and 6.47 times on the NSE. The volume in advancing issues was 47.4% (38.6%) on the BSE, and 13.2% (32.6%) on the NSE, while that in declining ones was 52.1% (59.6%) on the BSE, and 86.7% (67.4%) on the NSE.
The number of Hotline stocks at 200-day highs fell from 11 to 4, while 200-day lows rose from 6 to 11. 20-day highs fell from 13 to 4, while 20-day lows rose from 38 to 82. 5-day highs fell from 24 to 12, while 5-day lows rose from 136 to 180. The 240 Hotline stocks averaged a loss of 2.60%.
The nifty opened 45 points lower, with the session high at the open. It declined continuously for most of the day, making its low at 1515, and closing marginally above its worst. The CNX Midcap Index made its low at 1210, then flattened out.
Yesterday’s crash may have ended the intermediate downtrend that started on April 10. The CNX Midcap Index went below 7,875 for a confirmed downtrend, while the sensex and nifty closed barely above their downtrend trigger levels of 19,650 and 5,950, respectively.
Many of the Asian markets including the Hang Seng are in intermediate downtrends now. Most other indices have closed at 4-5 day lows, and could be in unconfirmed downtrends. Shanghai has held out, though.
The sensex and nifty’s long-term trend is best seen as sideways, as they do not have a clear sequence of rising or falling intermediate tops and bottoms. The last two intermediate tops are roughly the same for the sensex and nifty, while the broader CNX Midcap Index and the BSE SmallCap have much lower tops. The BSE SmallCap index has been below its 200-dma for over three months now. The CNX Midcap index has been crossing its longer term moving average both ways for some time now. Both are in major downtrends.
Most global indices are still in longer-term uptrends, with rising intermediate tops and bottoms.
The major trends of Wockhardt and Cummins India have turned down.
The FIIs bought $111.1 million of stocks on Wednesday, and are averaging daily purchases of $157.1 million over the last five sessions. The MF figure was not released. They were averaging sales of $34.3 million up to Tuesday.
The Dow fell 12.67 points (0.08%) to 15,294.50, and the NASDAQ composite went down 3.88 points (0.11%) to 3,459.42
Infosys fell 1.39% to $42.46, Wipro lost 0.38% at $7.82, Cognizant went down 1.60% to $64.11, Tata Motors rose 0.27% to $26.37, Sterlite fell 1.60% to $6.75, ICICI Bank lost 1.22% at $46.19, HDFC Bank gained 0.53% at $41.46, Dr. Reddy went down 0.45% to $37.32, MTNL fell 3.61% to $0.80, Tata Comm lost 4.88% at $7.40, iGate went up 0.07% to $14.19, WNS rose 1.44% to $16.25, Rediff went down 0.69% to $2.86, and Satyam Infoway fell 0.51% to $1.95.