Commodity Trade Mantra

Nifty Futures could test the crucial support of 5000 again. Highly Bearish outlook if 5000 level is breached.

Nifty Futures

Highly Bearish outlook for Nifty

The barometer index, BSE Sensex, was provisionally down 316.31 points or 1.82%, off close to 385 points from the day’s high. The equity markets breadth was weak. All the 13 sectoral indices on BSE were in the red. The S&P CNX Nifty was down 101.85 points or 1.93% to 5,189, as per provisional figures. The Nifty hit a low of 5,187.15 in intraday trade. Ever since the Nifty Futures shot up to a high of 5700 around 20th Feb 2012, it has been in a Sell at all rises mode & has dipped close to the crucial support of 5000 again. The Nifty Futures outlook will turn highly Bearish if the psychological level of 5000 is breached with strong momentum.

 European equity markets tumbled on Monday after weak manufacturing data for China and Europe and as French presidential elections fueled fears of further euro-zone turmoil. Key benchmark indices in UK,France and Germany were down around 1.53% to 2.53%.

Equities joined a global slump as euro-area services and manufacturing declined more than estimated in April.  A composite index based on a survey of purchasing managers in both industries fell to 47.4, a five- month low, from 49.1 in March. Forecast was for an increase to 49.3. In China, manufacturing shrank for a sixth month in April. The 49.1 preliminary reading of the purchasing managers’ index from HSBC Holdings Plc and Markit Economics today compares with a final 48.3 in March. Hedge funds cut their bets on higher commodity prices by the most in four months on mounting concern that Europe’s debt crisis will derail global growth and curb demand for raw materials. Money managers lowered net-long positions across 18 U.S. futures and options by 11% to 898,022 contracts in the week ended April 17, the most since Dec. 20, data from the Commodity Futures Trading Commission show. Energy and raw material producers dropped today as commodities declined.

Shares of DLF fell more than 4% after the Bombay Stock Exchange (BSE) said that pharmacy major Dr Reddy’s Laboratories will replace realty major DLF in the benchmark 30-share BSE Sensex. The change will come into effect from 11 June 2012. Telecom stocks fell across the board on reports telecom regulator Telecom Regulatory Authority of India (Trai) has proposed high 2G spectrum auction base price. Key benchmark indices extended losses to hit one-week lows in late trade as weak European stocks and lower US index futures hurt sentiment.

The Group of 20 nations on Friday pledged $430 billion in new funding to the International Monetary Fund, more than doubling its lending power in a bid to protect the global economy from the euro-zone debt crisis. The promised funds from advanced and emerging economies will provide the global lender with a huge war chest should the sovereign debt problems that have engulfed three euro zone countries spread and threaten a fragile recovery.

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