Market ended a volatile session in the red for 2nd day in running as traders squared positions ahead of August F&O series expiry today. Weakness in global markets kept bears active. Selling pressure was seen across the board with midcaps and small caps worst hit. Nifty closed at 5462, down 43 points. Open interests are on the high side, indicating that leveraged positions are higher in the market. Metal stocks fell as metals declined on LME by almost 4% in the last six days. TISCO is weakened by 3.2% & Hindalco shed 2.9% at Rs 163. Metal demand is already a matter of concern. Auto stocks weakened too. Nifty future closed at 5465 with 2 points premium. Open interest (OI)I for 5600 Nifty call & 5300 remained highest.

Telecom, pharma, & FMCG space can show good up move in the short-term. Yesterday Idea Cellular moved up by 4.5%. Bharti & R-COM are expected to follow. Bharti above 335 can reach Rs 370. R-COM target is around Rs 200. There is supports for Nifty around 5450 & thereafter approximately every 50 points down. A breach below 5350 would be confirmatory of end to the intermediate up trend that started from 4786 on May 25 & went to the 5549 on Aug 23, just 2 days back. If so, a fall to 5100 may happen. It may end around 5250. If Nifty remains above 5350, it can hit 5550-5600. Supports exist at 5455-5460 & 5410. Do not hold long position below 5450. Yesterday both DIIs & FIIs were sellers. DIIs have been consistent sellers while FIIs have been net buyers during last 3 months, which coincides with duration of intermediate uptrend. If the FIIs become net sellers, an intermediate downtrend is more or less guaranteed. We expect a flat opening to-day.

Markets are likely to venture more into the red terrain today mainly because of
a lack of any major positive cues from the global markets.
The domestic markets made a soft start on Wednesday, particularly as global
cues weren’t too supportive, but fortunately enough, the markets did not slip
down further like some of their Asian counter parts. The continuous weak
economic reports from the US markets have raised the concerns of double dip
recession and has made the global markets worried. Investors believe that if
there is a weakness in largest economy it will ultimately impact the other
nations as well. Asian indices continued their bear run on Wednesday as the
markets closed in the red, bleeding to touch new lows. The Japanese Nikkei
was down 1.66%, on reports of its export growth slowing for a fifth month in
July and the appreciating yen against the dollar. It had touched a new 15 year
high and that caused some panic amongst the investment community as a
siring yen is detrimental to the export oriented Japanese economy. The local
equity markets slipped further in the mid-morning session on the back of
persistent selling pressure in select heavyweights on valuation concerns. Weak
regional peers also weighed down the market sentiment in trade. The Indian
equity markets oscillated in a tight range, and were then able to limit losses due
to a recovery in most of the European markets. Although the markets were still
in the negative terrain near the closing period, the markets managed to recoup
some of the losses on the back of a positive opening of European markets,
providing the much needed fillip to the local markets, though the European
markets too succumbed to selling pressure few minutes after opening in trade
today. The benchmark equity indices traded in a volatile manner on concerns
raised by RBI that inflation, which has remained stubbornly high for several
months, was a major near term challenge for policy makers, though it sees a
very strong medium term outlook of the Indian economy. The Indian market
ended in red for the second straight trading session on Wednesday, with the
BSE Sensex closing at 18,179.64 down 0.72% and the NSE Nifty dropped
under 5,500 and eventually closed at 5464.95 with a loss of 0.78%.