Nifty ends expiry below 4650; Reliance at new 52-week low

The Nifty ended below the 4650 level in the last expiry series of the year 2011. The last one hour of trade was very bad for the market - as there was sharp slaughtering in capital goods, private banks stocks. Index heavyweight Reliance Industries pulled the Sensex down 183.92 points at 15,543.93. The Nifty fell 59.55 points, to close at 4,646.25.

This has, however, not surprised experts. VK Sharma, Head Private Broking & Wealth Management at HDFC Securities sees the new month could see a breach of the lows of 4,531.

"We are going to see the new bottom being formed in the month of January," he said, adding that the outlook going forward is bearish. "We would be willing to sell stocks, partly of what we have and partly to hedge the holdings, especially the banking ones," he further said.

There was a sigh of relief on inflation front today, which shows that the RBI may consider reducing policy rates in next policy meet in January. Food inflation dropped sharply to a six-year low of 0.42% in the week ended December 17 as against 1.81% in the earlier week. Primary articles inflation too declined at 2.7% versus 3.78% and fuel group inflation slipped at 14.37% versus 15.24% during the same period.

Aditi Nayar, economist at ICRA said, "The continued decline in vegetable prices subsequent to the harvest has resulted in a substantial easing of the food price index, despite prices of cereals and pulses remaining largely steady over this period. Additionally, the base effect has aided in the sharp decline in the pace of food inflation. Prices of non-vegetarian protein products are expected to firm up to an extent, in line with the seasonal trends.

Index heavyweight Reliance Industries closed at new 52-week low of Rs 712.90, down 3.47% while ONGC was down just 0.8%.