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Market Report

Tuesday, 29-Jan-2013

NSE

  • The benchmark BSE 30 Index, Sensex closed 112.45 points or -0.56% down at 19,990.90 below its psychological level of 20,000. The NSE 50 Index Nifty ended 24.90 points or -0.41% down to close at 6,049.90 after touching intra-day high of 6,111.80 today.

  • The stock markets gave up robust intraday gains and witnessed profit booking in interest rate sensitive stocks like banking, auto and metals after Reserve Bank of India announced 25 basis-point or quarter percentage repo rate cut.

  • RBI's statement that further easing of interest rates will depend on how Government in upcoming budget aims to reduce high fiscal deficit further dampened market sentiments. Analysts were cautious after RBI said that it expects current account deficit or CAD to rise further in December quarter. The market seems to have run out of steam for the near term and is likely to correct in the absence of positive triggers, say analysts.

  • Meanwhile, Asia markets gained today with Japanese stocks recovering from early weakness. European equities rose today, following strength in Asian markets where the spotlight fell on the possibility of further policy stimulus in China, though trade looked set to be cautious given fears over Spain's banks.

  • Not expecting big declines in stock market, said Mitesh Thacker. Index will still be a range of about 6020-6010 on the downside to about 6130 on the upside, says Thacker.

  • The commentary by RBI has also been less hawkish, said Krupesh Thakkar of Practical Financial Service. For Nifty, a close above 6130 is needed for the further upside. A sustainable move above 6130-6150 can take Nifty to even 6300 in the pre-budget rally, said Thakkar.

  • As the rate cut was already discounted by the market, a correction is more likely to set in now, said Arun Mewawalla of Quantum Securities. Also, there are no major triggers before the budget. Open interest has gone down despite the Nifty having gone up 190 points since last expiry, which indicates profit booking at higher levels. We could see the Nifty touching 5,900 levels, said Arun.

  • Markets rallied a bit after the news, but we expect that it will go in profit booking mode at higher levels, said Sanjeev Agarwal of Dynamix Research & Capital Management. We advise caution as upsides are very limited whereas downsides are scary. Investors should get much better prices to 'buy' by the end of 2013 as we see big correction in 2013, said Agarwal.

NIFTY 3-Month

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