The daily candle on the Nifty chart is a bear candle
with small real body and shadows on both sides.
After a third day of the fall, we expect market to hold
immediate support levels of 2750. High volatility is
likely to continue. Suggest shorts to be covered near
support areas.
The Nifty has supports at 2750 and 2700 levels and
the resistance at 2900, 2970 levels
RBI decided to take few more steps to limit the damage on the Indian economy. It has announced measures to boost dollar inflows by raising interest rates on NRI deposits. It has also decided to ease the liquidity pressure on Real Estate and NBFCs by lowering the provisioning and risk weight on loans to these battered sectors. The central bank will consider proposals for buy back of FCCBs, besides allowing registered housing finance companies to raise short-term loans overseas and extending the special repo for MFs and NBFCs.
The latest attempt by the RBI to ease the credit crunch is not a surprise given the extraordinary situation facing the Indian economy. It may at best bring some relief to the beleaguered financial markets, but is unlikely to lift the key stock indices beyond a few hundred points. The case in point is last week's trade, when the improved data on industrial production and a surprisingly sharp drop in inflation failed to perk up the markets. The fear is that the macro-economic numbers for the coming months may be even worse. The one bright spot could be further fall in inflation, could allow the RBI to announce more rate cuts.