Nifty struggles below 8900; HDFC Bank, Lupin, RIL support

The market remained under pressure in morning trade following weakness in global markets post Fed meet and ahead of big offer for sale of Coal India on Friday. Banking & financials, metals, telecom and select technology stocks dragged the market while Reliance Industries, HDFC and L&T supported the market.

The Sensex fell 150.68 points to 29408.50 while the Nifty lost 42.45 points to 8871.85 ahead of expiry of January derivative contracts today. However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising marginally.

Yogesh Radke, head of quantitative research at Edelweiss Securities is of the view that with rights issues, offer for sale, divestments, fund raising in the pipeline, there could be large supply in the market, so one needs to be a bit cautious at present and unwind long leverage positions.

The leverage positions in the Futures market have gone as high as Rs 1 lakh crore, he adds.

In an interview he says, although the India story is still intact, the Nifty is likely to consolidate or correct around 4 percent and see levels of 8600-8500. According to him 9000 levels would act as strong resistance.

Coal India dropped nearly 4 percent ahead of stake sale by the government tomorrow. HDFC, ICICI Bank, Sun Pharma, ONGC, Bharti Airtel and Mahindra & Mahindra declined 1.4-2.4 percent.

However, HDFC Bank and Lupin gained more than a percent on CCEA clearance for foreign investment in company. Reliance Industries climbed over a percent followed by L&T, HUL, Wipro and Hero Motocorp with 0.3-0.9 percent upside.

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