Posted By : Kishore B.S
The markets opened in the Positive zone in line with its Global Peers most of which were trading in Green zone, due to the positive sentiments prevailing after the Bailout announcement to fund the ailing banks of Spain.
With todays positive opening the Indices also clocked one of the best performing months in the last 3 months taking the gains to nearly 300 points from the start of the current month, where the indices started off at 4800 levels. The gains were largely lead by Infra stocks and some of the Blue chips, but the Indices started showing early signs of cool off when the Indices first dipped the 5100 levels to bounce back to make new highs at the 5124 levels.
The levels of 5124 is also of significance since above that level the indices could have easily trudged to the 5240 levels till which there is no other major resistance levels. But the Indices faltered and was trading around the 5110 levels for long time post the opening of the European markets which were brimming with huge positive sentiments and gains.
The announcements of the FM that drastic steps would be implemented to keep the GDP growth at 7% also failed to impress the markets and that should have been the warning signs that a profit booking or correction was in the offing, with the back to back gains for the last 4 sessions.
Finally the S&P announcement that India could be first country in the BRIC block to be degraded soon, sent the sentiments to shiver with the Indices tumbling down to the 4940 support levels by the end of the trading session.
Though the sentiments are favoring the bulls, ever since our markets have closed above the 5000 mark, yet the latest blow in the form of the S&P warning today could downplay the bulls and lead to further downside….. unless the 5000 mark is broken.
(Inputs Mr. Hemanth .V, Faculty TA, Stock Market Institute, Bangalore)