Nifty resistance seen at 5166 and 5194 - Alex Mathews

The markets had opened on a positive note completely reversing its trend on the back of positive cues from the Asian as well as US markets and thereafter witnessed good buying interest in the banking sector along with other rate sensitive sectors. The markets never felt the pressure and continued at the top and closed for the day at the higher level. The markets today gained back all that it lost the other day with Nifty VIX falling around 7%. The breadth of the market remained strong with 1,637 shares rose and 1,146 fell. A total of 122 shares were unchanged. Coming days are crucial as the October expiry would happen on 25th of October and we are yet to see a strong Diwali trend emerging. Also next week we are going to see the RBI officials coming together on Tuesday for the half year review. At the meeting, factors like current inflation, chance of further rise in fuel price especially LPG and Kerosene, recent rise in railway freight, slowing economy etc will be bulleted. It will be a hard decision to make as they have to bring down the rise and expected rise in inflation and at the same time give due importance to the slowing economic activities.

Nifty today closed considerably above the resistance of 5082 and is now looking at resistance level of 5166 and 5194 while the support is there at 5093 and 5043 levels. Corporate results have remained decent even though not the best and will, in coming days, support the markets.

On the sectoral front we saw buying in rate sensitive sectors like Banking, realty, auto and capital goods leaving no one on the losers' side. Sugar stocks gained today as we are nearing Diwali, the festival of lights and sweets, and also due to fact that the world is facing its biggest sugar shortage in at least four year and this glut is felt across Europe also.

Asian markets were all trading in green showing some recovery from the selloff that we saw yesterday. The US markets too gained yesterday after opening in red. Markets in US advanced on signs of economic recovery as earnings of Bank of America rose and Intel forecasted sales above the estimated figures. However the US futures are trading flat as Apple Inc's quarterly profits fell short of analyst's predictions for the first time in atleast six years as customers postponed their purchase for the newest version. Moody's cut Spain's credit rating for the third time since June of last year to A1 from Aa2 with a negative outlook following S&P which downgraded Spain on October 14th. But European stocks moved up amid conflicting reports that France and Germany have reached a deal on expanding the rescue fund for the region. Later in the day we are expecting the US building permits, CPI numbers and the housing starts numbers.

Source : Equity Bulls

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