Market Outlook ---- August 30, 2010

Dealer’s Diary

The key benchmark indices slumped on worries over the pace of the US economy’s recovery. IT stocks fell after the Union Cabinet approved the new Direct Taxes Code bill, wherein it proposed a hike in MAT on book profits to 20% from the prevailing 18%. The market recovered from the lower level at the onset of the trading session. The intraday recovery gathered strength in morning trade as Asian stocks came off lows, led by recovery in Japanese shares. The market extended losses to hit fresh intraday lows in mid-afternoon trade as European stocks extended initial losses and slumped in late trade. The Sensex and Nifty closed down 1.3% each, while the BSE mid-cap and small-cap indices closed lower by 1% and 1.3%, respectively. Among the front liners, ONGC, Tata Steel, RCOM and ACC gained 0–3%, while DLF, Hero Honda, ICICI Bank, Tata Power and JP Associates lost 2–3%. Among mid caps, FDC, Ispat Ind., Eicher Motors, Havells and Escorts gained 3–11%, while J&K Bank, Jubilant Food., Great Offshore, Puravankara and MVL declined 5–7%.

Markets Today

The trend deciding level for the day is 18064 / 5432 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 18183 – 18368 / 5472 - 5535 levels. However, if NIFTY trades below 18064 / 5432 levels for the first half an hour of trade then it may correct up to 17879 – 17759/5369 –  5329 levels.

Economic and Political News

·         Core infrastructure industries output up 3.9% in July 2010

·         Auto component industry to touch US $110bn by 2020: ACMA

·         Gujarat Government has earmarked Rs350cr for infra, tourism development

Corporate News

·         Jindal Power's Rs13,000cr project gets initial 'Green' nod

·         PFC to divest up to 20% through public issue: Government

·         TCS signs Rs130cr e-governance contract with Madhya Pradesh