Daily Market Outlook 9th April, 07

Market Snapshot

On Thursday, the Sensex opened a tad higher at 12,792, but dropped to a low of 12,712 due to mixed signals from the global markets. It wiped off most of its early losses during the mid hours of trade on account of revived buying interest amongst the index stocks. Despite the markets losing some of its gains during the final hour of trade, the indices managed to close into the positive territory on the final day of this
week's trade. The BSE Sensex closed at 12,856 up 69 points while the Nifty closed at 3,752 up 19 points.

The NSE and BSE cash volumes were slightly lower compared to the previous day at INR 690 and INR 31 bn respectively. The F&O volumes were higher at INR 249 bn.

Sentiment Indicators

The Implied Volatility (IV) across Nifty strikes has decreased to 26-27% levels. The WPCR of Nifty Options increased to 0.94 compared to the previous day while the 5 day average is 0.76.

Outlook

The markets are expected to open positive taking cues from US and strong Asian markets which gained on the back of higher than expected US employment data. This can be seen as an extended pullback and the market will wait till the 13th for Infosys guidance numbers for some positive trigger coming from the domestic front. Bank of Japan is also to come out with its interest rate announcements tomorrow.


Cement sector will continue to be a weak sector as the sentiment is still bearish. Metals stocks can gain some strength from strong LME prices and we continue to recommend Pharma stocks as market out performer.


The nifty closed the week at 3752 which is 70 points lower than the previous week. The three consecutive days of higher close does not negate the intermediate term bearish outlook of the Nifty.

We continue to look at the gains registered in the market as a pullback. The bearishness can only be negated, if the Nifty manages to close above 3820.

The immediate resistance for the Nifty is at 3782 followed by 3805. On the lower side the support is at 3735 followed by 3712