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Moderate weakness to start with is expected in today’s session if international cues and the movement of the SGX Nifty futures are any indications. The SGX Nifty both March and April series are trading close to 5220 as we write. The premium for the April series contract has evaporated.

Asian markets are showing a mixed bag kind of situation. Barring Japan, South Korea and New Zealand all other markets are in the red and amongst them Hong Kong is down heavily by more than 300 points, a fall of 1.40% nearly. Weakness seems to increase in Hang Seng. China and Taiwan are also down by 0.75% and 0.84% respectively at the time of writing this Market Outlook.

Probably, a test of 5180 once again is a likely possibility. We still maintain that the levels between 5180 and 5160 would give strong support to the market and chances are we might see a bounce back in the Nifty from those levels.

We need to watch the movements of oil & energy sector stocks as well as banking and financials stocks. These two sector would largely determine the swings in the Nifty while technology might give good support. The telecom stocks that had been doing well in the recent past, however, may show weakness during the day.

On the upside, the range between 5218 and 5234 would be quite crucial since if the index were to stay above this range it would mean strength coming back to our markets: we should see further upswing in that case. However, if you see the Nifty falling below 5218 and not bouncing back it would not be prudent to bet on the long side from a level close to yet below 5218 just as those aggressive players willing to bet on further fall would do better to tame such an urge and cover shorts if the index moves above 5234 subsequently.

Rajat K. Bose