Bloodbath that started on the Dalal Street after the Diwali week got extended for the third successive week as global worries and 2G spectrum allocation and housing loan scams back home spooked the bourses. The benchmark indices -- Sensex and Nifty -- witnessed cuts of around two and a half percent each during the derivatives' expiry week. The markets edged lower in four out of five trading sessions. Volatility remained evident throughout the week as futures and options' (F&O) traders switched their positions from November month contracts to next month series. Realty counter suffered deep cuts during the week as investors rushed for profit booking in anything related to real estate or infrastructure space after the Central Bureau of Investigation (CBI) unearthed fake housing loan scandal. Metal, public sector undertaking and capital goods pockets also took serious beating from the bears. On the flip side, software and technology counters showed some strength during the passing week. The beginning of the week was good as bulls made a roaring comeback on Monday after European Union (EU) and International Monetary Fund (IMF) agreed on Ireland bailout package. The next four trading sessions, however, remained miserable for the Indian equities as news of housing loan scandal, North Korea bombarding dozens of artillery shells on one of the border islands of South Korea and expiry jitters turned the bears in action. Besides this, worries over rescue package may not be enough to meet Ireland's debt obligations also weakened sentiments during the latter part of the week.
After declining rapidly for last few weeks, the pace of deceleration in India's food inflation came down and the figure settled for 10.15% for the week ended November 13 compared with 10.30% for the previous week. This was though a sixth consecutive week of decline, raising hopes that food inflation will come into the single digit levels in the near term for the first time in over a year.
The domestic equity markets may consolidate around the lower levels for the Dec series before showing any significant moves either way Meanwhile, possibility of further slide could not be completely ruled out as the FIIs will be busy in profit booking ahead of year ending. Besides this, monthly sales and production figures from auto, cement and steel makers will be watched closely by investors. Monthly HSBC Markit Purchasing Managers Index (PMI) for manufacturing and services activity in the country will also provide important cues to the equity markets in the coming week. During the week, S&P CNX Nifty touched the highest level of 6020.25 on November 22, 2010 and the lowest point of 5690.35 on November 26, 2010. On the last trading day, the Nifty closed at 5751.95, with a weekly decline of 138.35 points or 2.35%. For the coming week, 5621.45 followed by 5490.95 are likely to be good support levels for the Nifty, while the index may face some resistance at 5951.35 and 6150.75 levels. HAPPY TRADING…..
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