Pre Open Thoughts: Breakdown in Sentiment!!

Pre Open Thoughts: Breakdown in Sentiment!!

Ø  This week’s topsy-turvy ride is set to continue with expectation of a mildly higher opening. The sideways consolidation is likely to persist in the near-term as the earnings season winds down. There is a slight chance of a further breakdown in sentiment but expect value buying to support the indices at lower levels.

Ø  Today being the F&O expiry, intraday gyrations are likely to continue. A sharp drop in Nifty futures OI doesn’t auger well for May, especially with the indices trading close to 200-DMA.

Ø  In the meantime Moody's Analytics have said India is growing but below its potential as politics is weighing on the economy and termed the national government as the "single biggest drag" on business activity.  

Ø  The US markets didn’t react much to the FOMC statement and the Bernanke press conference.

Ø  Softer global conditions, weak investor and business confidence, government paralysis, and tight monetary conditions are all weighing on demand back home. Almost all sectors have slowed, with particular weakness in manufacturing and mining, alongside a worrying contraction in private investment

Ø  The Nifty has violated a key trough of 5200. We remain cautious in the near term as long as the Nifty trades below 5200, which corresponds to a bearish range.

Ø  The FIIs were net sellers of Rs 3.4bn in the cash segment on Wednesday while the domestic institutional investors (DIIs) were net buyers of Rs 407mn, as per the provisional figures released by the NSE.

Ø  Watch GMR Infrastructure as the Delhi Airport tariffs have been raised by 346 percent by sector regulator AERA, compared to an expected hike of 774 percent by the DIAL consortium. 

Results Today

Bata India, Biocon, Gujarat Gas, Idea Cellular, Kirloskar Industries, MRF, Sterlite Tech, Tamil Nadu Petroproducts, Strides Arcolab and L&T Finance Holdings.

Global Data Watch:

Germany Consumer Price Index (MoM) (YoY) (Apr), EU Consumer Confidence (Apr), EU Economic Confidence (Apr), EU Industrial Confidence (Apr), US Initial Jobless Claims (Apr 21), US Continuing Jobless Claims (Apr 14), Pending Home Sales (MoM) (Mar), UK Gfk Consumer Confidence (Apr).