Bouncing back towards the fag-end of the session in an
otherwise choppy trade, BSE Sensex on Monday closed nearly 34 points higher at
26350 with gains in different sectors. However, banking shares led by
state-run State Bank of India (SBI) were under pressure after the Reserve Bank
on Saturday introduced an incremental cash reserve ratio (CRR) of 100% for the
fortnight to absorb the surge in liquidity in banking system following demonetization
of high value notes. Besides, sentiment took a hit amid investors taking a
cautious approach in view of persistent capital outflows from emerging markets
including India by foreign funds after Donald Trump won the United States (US)
election combined with weakness in the rupee. Market was also influenced after
the Reserve Bank on Saturday asked banks to maintain a temporary incremental
cash reserve ratio (CRR) of 100% to absorb excess liquidity from the system
after the government’s move to withdraw high-value currency notes fuelled a
surge in deposits, triggering sell-off in banking stocks. The BSE Sensex ended
with a gain of 34 points at 26350. The benchmark indices opened at 26304 touched
an intra-day high of 26414 and low of 26183. The NSE Nifty closed 13
points higher at 8127 points. It opened at 8081 points, hitting a high of 8147
and low of 8067.
Technically, a strong break below 7950 will increase the downside pressure
and drag it to 7900/7850. Traders can go short on a break below 7900.On the
other hand, a decisive break above 8170 will ease the downside pressure and
take the index futures higher to 8200 and 8250 thereafter. Thus the trend in the short term and medium term timeframe
remains bearish whereas the trend in the long term timeframe still continues to
remain Bullish.
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Supports: 7950 and 7900
Resistances: 8170 and 8250
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