New Delhi: The bulls struggled through the day, as the market buckled under weak global cues. The Nifty broke below the 5,450 support but clawed back to close at 5,456 - with a 60 point cut. The Sensex closed deep in the red at 18,109, down 205 points.
The market plunged on the fear that there could be slowdown in some of the developed countries. Disappointing manufacturing data of major regions like the US, Europe and China had offset the sigh of relief offered by the agreement between the US house and Republicans for raising the US debt limit.
Jai Bala, Chief Market Technician, Cashthechaos.com warns that the downside pressure may continue for few weeks. “Once 5480 was breached on the downside, out of the blue selling pressure returned to the market. Right now the pressure is on the bulls and for them to defend the important levels,” Bala explains.
Sudip Bandyopadhyay, President of Destimoney Securities is disappointed that no permanent solution has been found to these problems (US or European debt crisis). Bandyopadhyay points out that triggers for Indian market will have to necessarily come from the region itself.
Bandyopadhyay adds that the market is hoping for some triggers to change the mood. “Mostly these triggers will have to come from the government of India whether in terms of the economic reform front or the fiscal management front,” Bandyopadhyay says.
However on an optimistic note, Amit Dalal, Executive Director, Tata Investment Corporation says that the circumstances which we have seen earlier is likely to be short-term. He is hopeful that things may improve over the next quarter or two and that is why the market is not much dampened than it should have been given what we were bombarded with.
Best bets
As a strategy, Bandyopadhyay says that the medium term and long term prospects of some of the telecom companies do look good but it is better to avoid telecom sector in the short-term.
Bandyopadhyay prefers buying State Bank of India at Rs 2300 and ICICI Bank at Rs 1020-1030.
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