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Market Report

Monday, 29-Oct-2012

NSE

  • The National Stock Exchange index Nifty ended 1.30 points up at 5665.60, after moving between 5698.30 and 5645.10. For the most part of the day the markets traded in a tight range with Sensex trading in a range of 160 points and the Nifty moved in a range of 53 points.

  • The BSE benchmark Sensex today erased most of its early gains to close just 10 points up amid the government unveiling a five-year road map for fiscal consolidation ahead of the RBI's policy meet tomorrow. After resuming on a positive note, the Sensex went up over 118 points to touch the day's high of 18743.41 on the back of optimism over the reshuffle of Cabinet on Sunday. The buoyancy was short-lived as the index slowly frittered away most gains due to choppy trade in interest-rate sensitive stocks to end at 18635.82, just 10.48 points up.

  • Meanwhile, the Asian markets eased today as investors switched their focus away from solid US economic growth in the third quarter to the weak state of global corporate earnings. But activity everywhere was expected to be thin as a massive hurricane closed in on the US East Coast causing regulators to close stock and options trading on Wall Street.

  • RBI's second quarter policy review on Tuesday would be key in determining the direction of the markets. The RBI is unlikely to announce any rate cut as inflation remains its key concern, though a 50 bps CRR cut is widely expected by market participants.

  • Sensex & Nifty are likely to test their 8-week moving average at 18581 & 5641. Close below 18530 and 5630 will see Sensex and Nifty correcting to 18200 and 5530, respectively, say market experts.

  • We are trading towards 5640-5635 mark which is the lower end of the range and if it closes below 5650 mark, then it might close below the 21 day average which will not be positive, says Mitesh Thacker, Technical Analyst, in a chat with ET Now. A break below 5635 mark could happen on the index with decline of 50-70 points more, he adds.

  • The market is awaiting RBI's second quarterly monetary policy and anticipating rate cut, said Rakesh Goyal, Senior Vice President, Bonanza Portfolio. However, if once again status quo is maintained, it might disappoint the market, he adds.

  • There is a lot of steam left for the stock market in the coming months, says Amar Ambani, Head of Research, IIFL. With improvement in business sentiment and money flow into equities, there is a case for expansion of the market trading multiple, currently at 13.5-14x FY14E earnings, to 15-odd times. This would translate into Nifty and Sensex targets of 6300 and 20000, respectively, he explains.

NIFTY 3-Month

(Data/Charts courtesy NSEI/Yahoo!/iCharts/The Economic Times)