"Our markets have turned volatile on monday, due to mix of positive results from index heavy weights, and negative overseas cues, finally closed almost flat. While sensex is hovering around 20 DSMA, Nifty is well below 20DSMA and faced stiff resistance yesterday in the final hours of trading, wiping out the gains made during the day. US markets closed positive over night, amidst volatility, and our markets shall open with positive gap due to huge shorting in Nifty futures, which continue to trade at 40 points discount to the spot since the beginning of the series.
Liquidity tightening is on cards by Chinese Government by increasing reserve requirements by 50 basis points from August 15th; Our RBI Credit policy and the measures to be announced around 12 noon hold the key for recovery or continuation of correction in our markets for some more time. In our view, the positive performance of bankex and banking sectors shares in our markets and ADRs overnight in US markets indicate the optimism among players that RBI might not disturb the liquidity in a big way, though would like to be cautious on inflation control, exchange risk and M3 management, sustaining GDP growth.
The day's range for Nifty shall be 4365 (Support) and 4545 (Resistance); Sensex shall be 15000 (Support) and 15555 (Resistance)
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