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Market Report

Friday, 14-Sept-2012

NSE

  • The 30-share Sensex opened 260 points higher and ended at 18464.27 up 443.11 points or +2.46% and the 50-share Nifty ended at 5577.65 up 142.30 points or +2.62% near seven-month closing highs with huge volumes. On February 21, 2012, the Sensex and the Nifty had ended at 18428.61 and 5607.15 respectively.

  • Logging its best single-day gain this year, the Indexes today vaulted to 14-month intraday highs as investors cheered government's decision to hike diesel prices and US Federal Reserve approved a new economic stimulus plan to bring in growth.

  • The positive sentiment prevailed despite inflation rising by a higher-than-expected in August, which may restrain RBI from cutting interest rates at its monetary policy review next week, said dealers. India's headline inflation rose to 7.55% in August as prices of potato, wheat and pulses as well as manufactured items soared. Inflation, as measured by the Wholesale Price Index (WPI), was 6.87% in July.

  • All European share indices were also trading in the green this evening aided by the US Fed's third round of quantitative easing. Among the major indices, the DAX and FTSE-100 were both up 1.4+% each while CAC-40 was up 2+%.

  • Today evening, the government has cleared the following proposals: (1) Up to 51 per cent FDI in multi-brand retail. (2) 100% single brand FDI with the requirement of 30% local sourcing. (3) Foreign airlines can buy up to 49 per cent stake in local carriers. (4) FDI cap raised to 74% in various services of the broadcast sector, except the TV news channels and FM radio where the cap of 26 per cent will apply. 74% also allowed in Mobile TV, which is an area of future growth. (5) Disinvestment in 4 PSUs: government will sell its minority stakes in four public sector firms - Hindustan Copper, Oil India, MMTC and Nalco-- to raise up to Rs 15,000 crores.

  • Don't see runaway rally, says ING Investment Management. In terms of metals we would continue to be underweight. This short-term spurt is possibly because of expectation that QE money will flow into commodities, it adds.

  • Buying on dips a better idea, says Mitesh Thacker. The entire Bank Nifty has shown momentum which clearly hints that there should be more upsides even if some of the other sectors which are doing very well, for example IT, go to into some kind of sideways consolidation, he adds.

  • Use 100-point declines on Nifty as entry points, says Ashwani Gujral. From a four or five days type of perspective, the entire rally from about 4770 right up to this level is getting to a nice culmination where we are getting good news every couple of hours, he says.

  • QE3 impact on India over-rated, warns Kotak. India is unlikely to benefit too much from the Federal Reserve's new bond-buying programme, Kotak Institutional Equities warned in a note dated 14-Sept.

  • It appears unlikely that the current rally would be a break-out rally and we expect the Nifty to remain range-bound in the 5250-5650 range for next couple of months, says Vinit Pagaria of Microsec.

  • Market should continue to be on upward trajectory - Recent reforms and announcements set towards continuation of the risk on rally that one has seen in global equities and India should continue sort of on its upward trajectory for sometime to come, says Prabhudas Lilladher.

NIFTY 3-Month