May 18, 2011

Nifty Outlook

Nifty may touch 5350 in 1-4 days, most of the Nifty heavyweights are looking weak like Infosys, SBI, Reliance, ICICI Bank. Inflation will rise in next data report due to hike in petrol, decision on diesel & L.P.G. is expected in the next week, an increase in their prices, is going to push prices higher that will add pressure on RBI to hike interest rate in coming months. Already banks, auto & realty sector is under pressure due to reducing NIM and high borrowing cost.

Europe debt problem is not over, Greece is struggling for bailout. US has reached debt limit on this Monday. Default by US will trigger bigger losses worldwide, may be more than 2008 slowdown.

So, unless nifty closes above 5700 which looks unrealistic at this point of time, downside trend will continue. Break below 5200 will open doors for 4600.

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