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Market Report

Thursday, 21-Feb-2013

NSE

  • The BSE S&P Sensex today suffered its biggest single day fall since May 2012 by plunging 317.39 points, or -1.62%, to close at 19,325.36 today - year's lowest level - on all-round selling, amid weak global cues triggered by concerns that US Federal Reserve's policy-tightening moves could hit liquidity. The NSE Nifty also fell below 5,900-level to close at 2-month low of 5,852.25 today, down 90.80 points or -1.53%.

  • Sensex has today washed out the 174-point gain in last 3 days. Besides global cues, brokers said, heavy capital outflows happened a week ahead of the Budget on fears of new taxes. Markets were also jittery as the crucial Budget session of Parliament began today with the United Progressive Alliance (UPA) government set to face a stiff challenge because of the controversies surrounding the chopper deal.

  • Global stocks witnessed selling pressure on worries over US Federal Reserve slowing its bond buying programme. The minutes of the last Fed meeting have raised concerns that US Fed may withdraw the monetary stimulus if there is some improvement in the economic data, triggering of a global sell-off across asset classes, including commodities.

  • European markets are seen following Asia lower, with financial spreadbetters predicting London, Paris, Frankfurt would open down as much as 0.7%. US stock futures were down 0.1% to suggest a weak Wall Street start.

  • Indian markets have received substantial FII money over the past few months and any reversal of the same may make markets vulnerable, if matching flows do not come from the domestic participants, said Dipen Shah, Head of PCG (Private Client Group) Research, Kotak Securities.

  • Good chance for Nifty trading around 5760-5750 mark, says Mitesh Thacker. The correction could be more than what we have seen as the closing was on the days low, we did not see any kind of covering happening during the day. The breakdown happened with the gap down and the gap was not even attempted to fill, he explains.

  • Market to go down; expect support around 5770-5800 levels, says Ashwani Gujral. Strong momentum is the time when you get follow through till 5850. Once that has taken out theoretically, you open up space all the way up to 5600, which is the 200-day moving average. There has been a sell signal yesterday on the S&P 500 in the US. Now if there is follow-through out there, our support levels are meaningless. So, the signal has come much before the Budget, six days before the Budget, and from here it is a downside. I do not think you will get too much of reprieve, although you may have support around 5770-5800 levels, he adds.

NIFTY 3-Month

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