Is Nifty and Sensex headed for another round of correction

Investors in the Indian stock market saw their wealth eroded by Rs 1.6 lakh crore today as the benchmark Sensex plummetted by about 432 points over negative global cues and poor industrial growth data .

Selling activity intensified across the board as sell-off in China and disappointing September IIP data back home spooked sentiments. All the sectoral indices were in the negative territory with realty, metals and banks worst hit.

Chinese markets were under pressure on expectations that the government tighten credit to contain inflation which hit a 25-month high in October. Shanghai Composite tanked 5.30 per cent. Indian Index of industrial production for the month of September fell to 4.4 per cent lower than the previous month's revised annual growth of 6.92 percent. The street was expecting growth of 6.4 per cent. The September IIP data is the lowest in 15 months.


 Total investor wealth , measured in terms of cumulative market capitalisation of all listed companies in the country, dropped to Rs 74.69 lakh crore at the end of today's session. It stood at about Rs 73 lakh crore on Thursday, the previous trading day.

The 30-share index Sensex declined by 432.20 points, or 2.1 per cent, to 20,156.89 today. This is the steepest decline registered by the Sensex since a 467-point fall on May 19, 2010.

Market breadth turned negative on the NSE with 1968 declines against 1180 advances.
Marketmen attributed friday's debacle to weak cues from Europe and China, as well as poor domestic industrial production numbers for the month of September.

"This is a knee-jerk reaction to the negative news flow from the global markets. Dalal Steet was already in a bearish mood, which became worse after the IIP numbers almost halved to 4.4 per cent for the month of September as against the year-ago period," SMC Capitals Equity Head Jagannadham Thunuguntla said.
The descent of the index was led by blue-chips Reliance Industries , ICICI Bank , SBI and DLF .


At the close of today's trade, market capitalisation of the country's most valued firm, Reliance Industries, stood at Rs 3.47 lakh crore, while state-run ONGC and software major TCS's valuations were Rs 2.79 lakh crore and Rs 2.06 lakh crore, respectively.
http://economictimes.indiatimes.com/markets/stocks/market-news/Debacle-on-Dalal-Street-erodes-investor-wealth-by-Rs-160K-crore/articleshow/6914334.cms
 
IS HISTORY REPEATING ITSELF i take you all to a report dated 27 jan 2010
 
http://economictimes.indiatimes.com/markets/stocks/market-news/BSE-Sensex-drops-6th-day-at-12-week-closing-low/articleshow/5505583.cms
 
the content of which is reproduced
 

The BSE Sensex fell for a sixth session on Wednesday, sliding 2.9 percent to its lowest close in nearly 12 weeks, as investors joined a regional sell-off on concerns China's efforts to cool credit demand could hurt global recovery.

Financial stocks led the drop on caution ahead of the Reserve Bank of India's (RBI) monetary policy on Friday that is widely expected to tighten banks' reserve requirements.

The 30-share BSE index dropped 2.92 percent, its biggest one-day fall in nearly three months, and ended down 490.64 points at 16,289.82. Only one of its components closed in the green.

It posted the longest run of losses in nearly three months and matched a six-day slide to early November last year.

A.V. Srikanth, executive director of private wealth management at Anand Rathi Financial Services, said the market was catching up with falls in Europe and Asia since Tuesday, when the domestic bourse was closed for a holiday.

"We are bearing the brunt of yesterday's and today's decline in world stocks," he said. "People are also jittery before the RBI policy."

Global stock markets fell again on Wednesday as investors were worried about a monetary squeeze from central banks around the world and also the impact of tightening U.S. banking regulation.



Foreign funds have pulled out $676 million from Indian equities in the last four sessions. They had moved in $17.5 billion in 2009 and powered a 81 percent rally in the main index.

Top lender State Bank of India fell as much as 5.7 percent as investors worried about its outlook and asset quality after it reported December quarter results on Monday evening.

State Bank said it expected steady loan growth for the full year but warned that surplus deposits and higher bad debt could impact profits in the March quarter.

"Though margin improvement was better than expected but increase in NPAs (non-performing assets), lower coverage and increase in duration risk remain overhangs on SBI's earnings, in our view," JPMorgan said in a note obtained by Reuters.

State Bank ended down 5.1 percent at 1,987.15 rupees, while rival ICICI Bank dropped nearly 5 percent to 790.20 rupees.

Metals makers fell as an appreciating dollar and on worry further policy tightening in China and proposed U.S. bank regulations could stifle demand for metals.

Tata Steel , the world's eighth-largest steel maker by output, dropped 8.5 percent to 558.70 rupees while non-ferrous metals producer Sterlite Industries shed 4 percent to 770.05 rupees.

Aluminium maker Hindalco fell 5.7 percent to 150.10 rupees. Its December quarter net profit had dropped 22 percent and missed the street view.

Export-focused outsourcers declined on fears U.S. President Barack Obama's plan to limit risk-taking by banks might hit their order flow.

Infosys Technologies and Tata Consultancy Services lost 1.6 percent each, while Wipro shed 5.8 percent.

Energy giant Reliance Industries , which has the highest weightage on the main index, closed 1.5 percent lower at 1,025.85 rupees.


CONCLUSION

Corrections are always good for Bull market i think market will correct 8-10 percent across all asset classes
all across the board 'including this' there were news floating that sensex and nifty shall scale new highs
so some fear is lurking some where
and we need good pricing for indian stock so that FII may buy more at those prices
existing FII investors will try to seek frenzy in this market to cause retailers to sell low so that they can buy more at lower price
indian nifty vix at 11 percent tells us volatility is at helm
so be cautious in one to two months book profits and maintain some cash (35-40 percent)would be useful to buy when market corrects
PLEASE ALLOW SENSEX TO CORRECT TO 19350 AND NIFTY TO 5835
for a risk free sustainable upmove

Where will you find Nifty stock at 6000

An attempt is made to identify the high flyer should Nifty be able to scale 6000 mark

by 15 October 2010. This trend has a probability of 0.86

Scrip.........Up Rs ..Target...Baseline
SUZLON 13 67 49
DLF 70 437 316
JPASSOCIAT23 144 109
UNITECH 16 102 70
MARUTI 216 1699 1329
STER 29 201 155
BHARTIARTL 59 426 321
NTPC 34 243 187
POWERGRID 16 121 95
SAIL 31 236 185
GAIL 72 551 432
JINDALSTEL 99 791 626
HEROHONDA 278 2128 1627
BHEL 347 2798 2217
LT 297 2316 1806
TATAPOWER 149 1476 1193
BPCL 109 899 711
HCLTECH 63 485 374
CIPLA 47 363 286
IDEA 10 87 69
HINDUNILVR 39 355 276
KOTAKBANK 61 546 435
HINDALCO 24 215 172
IDFC 26 233 178
WIPRO 56 502 399
ACC 127 1139 915

RELCAPITAL 99 913 729
PNB 159 1443 1151
ONGC 179 1618 1287
TATAMOTORS 134 1205 967
AXISBANK 188 1691 1343
ICICIBANK 139 1251 990
SBIN 361 3499 2842
HDFCBANK 311 2800 2191
INFOSYSTCH 379 3422 2724
ABB 109 991 793
HDFC 91 820 657
SUNPHARMA 240 2163 1712
TCS 116 1046 842
SIEMENS 98 884 711
M&M 86 776 623
RELIANCE 125 1128 903
RANBAXY 71 642 510
CAIRN 41 371 297

ITC 22 201 161
AMBUJACEM 16 162 130
TATASTEEL 69 699 568
RPOWER 14 175 143
Evaluate independantly before investing in any of the above scrips

Baseline refers to median price should an correction occurs