Strong close below today’s low of 5,106 on the Nifty may result in a change in uptrend which started from 4,771on 4th June

The market erased all its gains and settled in the negative as the government's initiatives to boost growth did not meet market expectations. We may now see the uptrend weakening. Tomorrow if there is strong close below today's low of 5,106, we may see a change in the trend. The National Stock Exchange (NSE) saw a volume of 56.86 crore shares.  

The market opened on a firm note ahead of the announcement of fresh initiatives to curb the rupee slide after the Indian currency hit a historic low of 57.32 against the dollar on Friday. Meanwhile, markets in Asia were mostly lower in morning trade on concerns about the pace of the global economic growth and unending woes in Europe.

Back home, the Nifty opened 13 points higher at 5,159 and the Sensex added 66 points to its previous close and started off today's trade at 17,039. Banking, metal, auto and capital goods stocks supported the early gains.

Meanwhile, the rupee was trading 71 paise higher at 56.44 against the dollar following a sharp recovery on fresh selling of the American currency by banks ahead of expected measures from the government to arrest the rupee's decline.

In another development, Ratings agency Moody's today retained the outlook on India's rating at stable despite a slowdown in gross domestic product (GDP) growth rate saying that it is unlikely to be even a medium-term feature. Moody's decision comes against the backdrop of two other leading agencies-Standard and Poor's and Fitch lowering the credit rating outlook to negative.

Trading in a narrow range, the indices crawled to their intraday high in late morning trade. At the highs, the Nifty rose to 5,195 and the Sensex went up to 17,131. Profit booking at the highs saw the benchmarks paring part of the gains, but they were still in the positive terrain.

The domestic market dipped further in noon trade as the key European indices opened in the red as investors were wary of any new announcements from the European Union leaders, who are meeting later this week to discuss possible solutions to end the lingering debt crisis.

The indices drifted further southwards and into the negative in the post noon session on a fall in the rupee and the measures announced by the government to push economic growth did not meet the street's expectations.

The market touched its intraday low at shortly after 3.00pm with the Nifty falling to 5,106 and the Sensex retracting itself to 16,853.

Although the market closed in the red for the second straight day, the indices were off the lows.  The Nifty closed 31 points lower at 5,115 and the Sensex fell by 90 points to settle below the psychological level of 17,000 at 16,882.

Markets in Asia closed lower on concerns over slowing growth in key economies like China and the US and the worsening debt situation in Europe.

The Shanghai Composite tanked 1.63%; the Hang Seng declined 0.51%; the Jakarta Composite fell by 0.82%; the Nikkei 225 fell by 0.72%; the Straits Times lost 0.45%; the KOSPI Composite dropped 1.19% and the Taiwan Weighted settled 0.77% lower. On the other hand, the KLSE Composite ended flat at 1,603.
At the time of writing, the key European indices were down between 0.70% and 1.67% as Spain officially sought financial aid from its Eurozone partners to boost its banking system. US stock futures were also in the negative following the latest news from Spain.

Back home, institutional investors were net sellers in the equities segment on Friday. While foreign institutional investors pulled out funds totalling Rs174.22 crore, domestic institutional investors withdrew Rs1.27 crore from stocks on Friday.