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It looks like Dalal Street has entered a haunting bear phase. Call it bluechips, frontlines, or Z-stocks, all were battered irrespective of the sector it belonged to. The week (9-13 Oct) in the Dalal Street saw its worst history. The markets opened the week on a negative note with Sensex recording a 36 points loss over last week’s close. The bearish trend continued to dominate the market for the rest of the days with the only exception on Thursday, which witnessed a marginal recovery only to short live. Impressive second quarter results announced by Infosys, and Satyam failed to make any positive impact on the market. RBI's announcement of credit policy was completely ignored by the market inspite of it containing some positive measures. The markets retreated as selling pressure gripped all the sectors. Wednesday saw both Sensex and Nifty plunging to year's low. As many as 134 stocks touched 52-week lows. Even the bluest of the blue chips crashed heavily. The storm left the 30 stock sensitive index loose about 353 points in the last five trading sessions to close at 3738.

Not only are the external global factors the reason for the setback, unsurprisingly even the domestic economic forecast, ended up as a major culprit in pulling down the markets.

The oil price concerns on account of growing tension in the West Asia left, not only the Nasdaq, Dow and other European markets crashed, but also rattled the domestic bourses. With the tension between the Palestinians and Israel still holding tight, the international crude oil prices would even soar to a high of $40. Nothing to wonder about. It would not be a surprise if the markets are taken for another catastrophic ride in the coming days.

The downgradation of economic rating outlook by Standards and Poor is another key reason for leaving the undertone of the Indian bourses remain bearish. It led the overall view on the country take a dip. Adding to the woes was Reserve Bank Of India (RBI) and Centre for Monitoring Indian Economy (CMIE) substantially marking down the Gross Domestic Product growth. The CMIE scaled down the GDP growth to 5.8 per cent for the current fiscal as against its earlier forecast of 7 per cent. The stock markets rolled merrily along, to slide further as economic data portrayed a falling economy. Where are these markets heading?

According to technicals, the neutral and bullish trigger levels of both the indices are quite far away. The next crucial support level for the Sensex is around 3,650 levels. If in any case the Sensex breaches that level, the bourses could be headed for another big freefall.

Karthik Raj

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