> Sensex crashes... Big Time

The market tumbled last week, with the Sensex plunging 8.71% (1,814 points), the Nifty 7.98% and the CNX Midcap 6.75%. All the 30 Sensex stocks declined. DLF was the biggest loser with a 15.9% loss. Other losers were Reliance Energy, ICICI Bank, NTPC, Reliance Communications, HDFC Bank and Reliance Industries, with losses between 10% and 15%.

Among the more heavily traded non-Sensex stocks, eClerx Services was the biggest winner with an 8.8% gain. Other gainers were Educomp Solutions, Welspun Gujarat Stahl Rohren, Burnpur Cement and Apollo Tyres, with gains between 6% and 8%.

Himachal Futuristic Communications was the biggest loser among the more heavily traded non-Sensex stocks with a 22% loss. Other stocks with losses exceeding 15% were Lanco Infratech, Bajaj Hindusthan, India Infoline, Aries Agro, DLF, Nagarjuna Fertilisers, Jai Corporation and Reliance Capital.

INTERMEDIATE TREND:All the indices entered intermediate downtrends last week. Most global markets have been in downtrends for a longer period.

The Sensex has to cross 20986 to get back into an intermediate uptrend. The corresponding level for the Nifty is 6260, and 9162 for the CNX Midcap.

LONG-TERM TREND:The market’s long-term (major) trend has been up since June 14, ’06. Hence, we are in an 18-month-old bull market. The bull market will end if the indices close below their previous intermediate bottoms.

These stand at 18183 for the Sensex, 5394 for the Nifty and 6463 for the CNX Midcap. It will be best to round down these bear triggers to 18000 for the Sensex and 6400 for the CNX Midcap.

A bear market is a real possibility, with the Sensex having already retraced 72.5% (2,193 points) of the 3,024 points it gained during the previous intermediate uptrend. Also, a global bear market appears to be on, and it will be difficult for us to escape its effect.

STRATEGY: Fresh long and medium-term purchases should be made only after the next intermediate downtrend ends, and provided the bull market continues.

GLOBAL PERSPECTIVE:Most global indices have signalled bear markets by falling and remaining below their previous intermediate bottoms. The Indian and Chinese markets are among very few that are yet to do so. A global bear market can be assumed to be on.

The Sensex’s gain for the 12 months that ended on Thursday stands at 38.6%, making it the fourth best performer among 40 well-known global indices considered for the study.

Shanghai heads the list with an 86.9% gain. Indonesia and Egypt are the other markets ahead of us, with gains of 49% and 48.4%, respectively. (These rankings do not take exchange rate effects into consideration).

The Dow Jones Industrial Average has lost 3.3% and the Nasdaq Composite 3.9% during the same time interval.

Mumbai:The markets witnessed panic selling pressure and lost further ground on Monday morning on the back of weak cues from the global markets followed by the liquidity crunch on the back of mega IPO's in the recent past have been the major factor for this relentless fall.

All the key BSE indices were trading in red with significant cuts led by the realty, midcaps, banking, capital goods and metals. Breadth on the NSE was extremely negative. The advance-decline ratio was 1:15.

At 10.25 am, the Sensex was down 629.75 points or 3.31 per cent at 18383.95, and the Nifty down 155.55 points or 2.73 per cent at 5549.75. About 335 shares have advanced, 2602 shares declined, and 44 shares are unchanged.

Ranbaxy was the only stock on on Sensex which was in green. DLF, ITC and Rel Comm were the leading losers on the Sensex. On Nifty, major gainers were Suzlon, Ranbaxy Lab, Nalco. However, GAIL, BPCL and Unitech were the top gainers.

Reliance Industries, RNRL, Reliance Energy were the most active counters.

Asian markets were trading weak. Hong Kong's Hang Seng slipped 2.51 per cent or 633.15 points at 24,568.72. Japan's Nikkei plunged 3.36 per cent or 466.01 points at 13,395.28. Singapore's Straits Times fell 1.48 per cent or 45.82 points at 3,058.43. South Korea's Seoul Composite declined 1.99 per cent or 34.57 points at 1,700.15. Taiwan's Taiwan Weighted dropped 0.21 per cent or 17.20 points at 8,167.45.

Market Cues:

> FIIs net sell $541.9 million in equity on Jan 17

> MFs net buy Rs 361.2 cr in equity on Jan 17

> NSE F&O Open Int down by Rs 3506 crore at Rs 1.30 lakh crore

F&O Cues:

> Futures Open Int down by Rs 4381 cr, Options Open Int up by Rs 875 crore

> Nifty futures add 11 lakh shares in Open Int, at 25-point premium

> Nifty Open Int PCR at 1.05 vs 1.11; has fallen from over 1.30 a week ago

> Nifty Puts Open Int unchanged, Nifty Calls add 8.7 lakh shares in Open Int

> Nifty 6000 Put sheds 3.2 lakh shares in Open Int

> Nifty 5500 Put adds 2.3 lakh shares in Open Int

> Nifty 5700 Put adds 1.8 lakh shares in Open Int

> Nifty 5800 Call adds 3 lakh shares in Open Int

> Nifty 5900 Call adds 1.9 lakh shares in Open Int