Markets volatile; rate sensitives struggle, RIL strong

CNBC-TV18’s Executive Editor, Udayan Mukherjee - We have not made much progress today after yesterday’s pullback. For parts of the day it looked like the Nifty was ready to get above 4,300 mark but it has not managed. In fact in the middle of the day there was a fall then there was a sharp price, which took us back to 4,300. But from there we have slipped once again in fact in the red. So it has been a bit volatile today; not entirely unexpected given today is the last day of the June series but even so, it is a bit disappointing that the market has not been able to hold on to its gains after a reasonably promising start this morning.

Worst still is the market breadth, midcap index is in the red. The advance/decline ratio is not very convincing, so bit of a nothing day but with a touch of volatility today.

The two attempts today to get back above that 4,300 mark have not been very successful so the lingering suspicion that this time too the pullback is getting sold into earlier than what traders expect and that is a very discomforting feeling. Maybe tomorrow once this settlement is out of the way, we could probably have a cleaner pullback if all other factors like global markets and crude are supportive.

But right now I think you are in that no-man zone where you do not know what to guess whether it is still a pullback or it is fizzling out and it has all been about Reliance today. If you just take Reliance out of the equation, we actually have a fairly poor market on our hands. The breadth is not convincing, fertilizers have done well but the rest of the midcap or the more liquid stocks have not done well.

All the rate sensitives are struggling, autos are down, banks have not done very well, real estate is down. So after yesterday’s pop back in some of the rate sensitives today they have got sold into once again. Even infrastructure all the Hindustan Constructions, Punj Lloyds or GMRs of the world are actually down in the red. So it is not a great market and once you look at it internally it is just Reliance, which is holding the Sensex and Nifty up this point in time but otherwise it is not convincing. Maybe tomorrow with a clean slate after the settlement is done we will get a better sense.