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Market Report

Tuesday, 18-Dec-2012

NSE

  • Sensex, the benchmark BSE index, rose +0.63 per cent or 120.33 points, to end at 19364.75 today marking its biggest single day per centage gain since Nov 30. The broader NSE index, Nifty, rose +0.66 per cent or 38.90 points, to end at 5896.80 today, marking its highest close in a week.

  • Earlier, markets had opened marginally higher ahead of the policy announcement but fell sharply after the Reserve Bank of India kept key policy rates and the cash reserve ratio unchanged. Later, markets rebounded from their intra-day lows led by recovery in bank shares on hopes that parliament will pass the banking amendment bill. Parliament is expected to amend banking laws that include raising the limit on shareholders' voting rights in public and private sector banks, a step seen as largely positive towards the government's reform drive and will bring in more foreign investment.

  • RBI kept rates on hold today ignoring government pressure to reduce borrowing costs, but said it was shifting focus towards boosting a flagging economy, raising the odds of a rate cut as early as January. RBI kept the Cash Reserve Ratio (CRR), Repo rate and SLR unchanged. Repo rate was unchanged at 8%. CRR has been kept unchanged at 4.25%. Reverse Repo Rates has been kept unchanged at 7%.

  • Analysts said domestic markets benefitted from improved demand for global risk on the back of signs of a US budget compromise intended to resolve the so-called "fiscal cliff." Meanwhile, most of the Asian markets ended on a positive note as signs of compromise sparked new optimism that the US "fiscal cliff" budget tussle will be resolved soon. The European markets have also opened on a positive note tracking gains overnight on Wall Street.

  • Sensex, Nifty likely to hit new highs in February, say Analysts. They are of the view that the market uptrend is likely to continue and may hit new highs before the next Union Budget.

  • Ashwani Gujral says: The market is taking disappointment so well that means that is underlying buying and the market when does not go down on bad news chances are strong. Next time in January when rates are actually cut by RBI you may see profit booking start at that point, he adds.

  • As of this writing, the Lok Sabha has already passed the Banking Bill aimed at drawing foreign investment to the banking sector by increasing shareholders' voting rights.

NIFTY 3-Month

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