With the start of the new Samavat trading day, the markets tanked on Thursday after opening on a largely negative note courtesy the Global cues and negative seeds imbedded amongst the investors, due to the sagging Economic Outlooks after the dismal IIP data.
Though the Inflation numbers came in a tad lower than expected at 7.45% from last months peak of 7.81, raising hopes amongst the participants of a likely rate cut by the RBI, yet the chances remain low for time being, since Mr. Subbu seems unlikely to change his hawkish view on the Inflation yet.
On the other hand the correction that started off in the US markets post reelection of Obama is not seeming to end soon, the Dow has corrected by nearly 850 points or 7% from its high of 13400 levels to the current 12550 levels. And the world or Global markets too seem to be following the US markets going by the saying that if the US sneezes the World Markets catch Flu.
Also todays developments in the Euro are Indicating signs of new fears cropping up regarding the Growth of the Euro zone, which is likely to add further the market woes.
Coming to the Technical charts they are Indicating that the Indices are now poised in the MOST critical part where on the weekly charts if they close below the 5630 levels tomorrow then a further dip to the 5526-5440 levels cannot be ruled out, since a closure below that 5630 levels would give way for the short & medium term trend from Up to down.
Contrarily if the Indices close above the 5630 levels and if the 5690 is breached on the higher side then the uptrend would be intact and resume further on.
All said and done, markets are always the master and they are the key to the success, and hence without further thoughts it would be wise to watch out for the closing tomorrow so that the directional course of action would be clear for all to see and till then stay put on cash ……..
Inputs: Mr. Hemanth.V, Faculty TA, Stock Market Institute – Bangalore)