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Concerns of a slowdown in the US continued to haunt the markets in today’s trade, reports CNBC-TV18. They were hit by intense volatility and finally slumped into the red. The Nifty closed at 5,742 down 35 points, while Sensex shut shop at 19,080 down 182 points

The breadth of the market remained negative throughout the day. It was a disappointing day for the midcap and smallcap counters which had been outperforming the frontliners for some time now. The volume in today's trade was quite appreciable. Metal, banking, power, cap goods and realty stocks traded under pressure for most part of the day. However, pharma, durables and FMCG stocks remained firm.

Commenting on what he made of yesterday’s selloff Amitabh Chakraborty of Religare Securities said that yesterday’s 800 point fall was unexpected. He said that their call today morning was that markets should come back from 19000, 19100 levels and that’s what has happened. “But still we have to watch the market very closely that whether we are out of woods,” he added.

So does he expect more downside or will the markets stabilize and bounce back? Chakraborty said, “As of now it looks like that after a jerk, probably the market will stabilise around this level. If it stabilises at this level, the market will go up by the end of this month or beginning of January and it will then scale towards 6,200.

Chakraborty said that he’d be worried if the market closes below 19,000 levels. “In that case, for my next levels I would be looking at 18500-18600 levels,” he added.

Meanwhile Rajat Bose of rajatkbose.com said that now that the Nifty has come very close to about 5,710, which is it’s intra-day low, suppose we were to breach that now and close below that on a real time basis, not on the adjusted close, then chances are that we might actually test that support zone between 5,640 to about 5,600. “That would roughly correspond to about 18,750 to 18,700 levels and that is a very strong support area,” he explained. According to Bose, one can expect some kind of buying to re-emerge.

However, he added that the one thing actually giving him a lot of concern is the premium that Nifty Futures is enjoying. “In recent months I’ve never seen Nifty Future enjoying so much of a premium. So, 5,850 kind of level was a very strong resistance for the Nifty future and it could not go beyond that. We need to see how the premium actually comes down. At least some short build up is required for a good bounce back,” Bose said.

Source: Moneycontrol.com