Markets continue six day losing streak; Nifty ends below 2650

19 November 2008

The markets wiped out earlier gains in the last hour of trade and ended on a weak note. Dismal cues from European markets and sliding US futures can be attributed as reasons for today's fall. The markets have closed weak for the sixth day in a row. However, at the start of trade, it looked like the markets would reverse this trend and hold on to their psychological levels, but that did not happen. The Nifty closed below 2,650 level while the Sensex settled below 8,800.

Selling pressure was seen in capital goods, power, banking, oil, metal, telecom and technology stocks. Midcap and small cap stocks also followed the same trend, due to which breadth remained weak.

Short covering rally was shortlived as stoplosses got triggered in late trade. Flows continue to be negative at FII desk, as there was a basket selling from leading FIIs in late trade. Reliance Industries witnessed profit booking in last half an hour of trade, after buying support by long only funds in early trade. Experts believe that the Nifty broke crucial 2650 level, so it may trigger stoplosses further.

Leading contributors to this fall were L&T, ICICI Bank, HDFC, HDFC Bank, SBI, Reliance Communication, Bharti Airtel, ONGC, BHEL, Satyam and Reliance Industries.

The Sensex shed 163.42 points or 1.83%, to close at 8,773.78, after hitting an intraday high of 9,236.27 and low of 8,726.80. The 50-shares NSE Nifty touched a high/low of 2772.40 and 2617.90, before finishing the session at 2635, down 1.79% or 48.15 points over previous close.

Daryl Guppy, Founder and Director of guppytraders.com expects the markets to retest the October lows in a week or a fortnight. He sees support for Nifty at 2400 and said that the 2900 would serve as a resistance for the Nifty.