Pre Open Thoughts: Bumping into resistance!

Pre Open Thoughts: Bumping into resistance!

Ø The cheerful skies are seeing a colour change. After a small breather, world equity markets have slipped back into consolidation mode.

Ø Back home looks like the prospects for Indian economy are going to be bad . Nothing is going right at the moment. The Government’s FY12 GDP growth forecast of 7% is under threat. In fact, things may remain downbeat given the policy inaction and a deteriorating external backdrop. Five states will reportedly end polls and declare results on 9^th March. Expectations of a fiscally prudent budget might not get fulfilled. Budget Parliament session starts on 12^th march railway budget to be presented on 14^th march whereas union budget will be on 16^thMarch.

Ø The opening is set to be flat. Stocks in the US and Europe pared losses overnight. Asian indices are mostly in the green this morning.

Ø It would be prudent to remain cautious given the downbeat sentiment and worsening macro-economic backdrop. The intermediate up-trend could pick up if the Nifty sustains above 5400 which is the near term strong resistance for the Nifty where we feel some profit booking is not ruled out. On the way down 5200 level, which acted as a strong resistance before, may now act as strong positional support for the market.

Ø The Foreign institutional investors(FII’s) continued to be on the buying side with provisional figures for Tuesday stood at Rs 6.18bn in the cash while the Domestic institutional investors (DIIs) were net sellers at Rs 8.54bn, as per the provisional figures released by the NSE.

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