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Market Report

Tuesday, 30-Oct-2012

NSE

  • The 50-share Nifty index broke down from its key support level of 5630 and closed 67.70 points lower at 5597.90, below its psychological level of 5600 today. The BSE Sensex corrected sharply and lost over 200 points in quick succession in trade today. The index ended the day at 18430.85, down 204.97 points. Both Sensex and Nifty posted their biggest falls in three weeks.

  • The markets were going smoothly until RBI's decision to keep repo rates unchanged came in. Although CRR rates were reduced, according to analysts, key rate sensitive stocks fell sharply after the central bank hinted of easing policy rates in the fourth quarter of the current financial year. The disappointment over the RBI's decision threatens to leave stock markets with few triggers, as both indexes head for their first monthly declines since July.

  • The Nifty has also closed below its cluster of moving averages. Going forward the Nifty is likely to fall to the levels of 5527. Trading below which the Nifty can fill up the rising gap (witnessed on 14th Sept. 2012) placed in the range of 5447.40-5526.95 levels. On the upside the Nifty has immediate resistance at 5630-5658 levels.

  • Asian shares were subdued today after a powerful hurricane curtailed activity in US markets overnight. The European markets were trading marginally higher keeping within their recent range in a quiet session with Wall Street still closed.

  • Higher inflation is likely to impact the rate-sensitive sectors like banks, realty and automobiles. And market may see further correction up to 100-150 points on the Nifty in the coming month, said Nidhi Sarswat, senior research analyst at Bonanza Portfolio Ltd.

  • Benchmarks may come under pressure and the Nifty may fall to 5470 levels in the next week or so. Post that, some fundamental buying may come in, says Prakash Diwan, Chief Portfolio Strategist, Prakash Diwan's Wealth Circle. Diwan is of the view that the overseas environment is also benign and inflows are also low at the moment and FIIs should resume pumping dollars by the second half of November.

  • The markets were trading in a range anticipating a rate cut. Given the fact that the rate cut didn't happen and subdued global markets, we might see a breakout of this range. I see the Nifty correcting 50-60 points in the next couple of days, says Sharmila Joshi, Market Expert.

  • Markets were standing at precarious position both technically and fundamentally. The sticky high inflation suggests that the RBI will not cut rates in next quarter as well. The global cues have also been not supportive. The Nifty has support at 5580 and if that is breached, then 5460 can be expected, says Jagannadham Thunuguntla, Strategist, SMC Global Securities.

NIFTY 3-Month

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