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Market Report

Tuesday, 26-Feb-2013

NSE

  • The BSE benchmark Sensex today plummeted by 316.55 points or -1.64% to close at three-month low of 19,015.14 as the rail budget dampened the market sentiment amid particularly weak global cues. Similarly, the broad-based National Stock Exchange index Nifty dipped below 5,800 level for the first time since November 27, 2012, and closed 93.40 points, or -1.60% lower at 5,761.35 today.

  • The Sensex at one point of time fell below 19,000 level for the first time since November 29, 2012, as government announced hike in rail freights, particularly commodities, raising fears of a rise in inflation. Union budget and monthly expiry in the derivatives segment on Thursday were other weakening factors, brokers said.

  • The Railway Ministry today hiked the basic freight charges of grains, pulses and groundnut oil by nearly six per cent, a move that will lead to increase in prices of food items, it is feared.

  • Besides a weak Asian trend and lower opening in Europe on concern Italy's elections may reignite Europe's debt crisis, further influenced the trading sentiment, added brokers. Japan's Nikkei fell sharply at the opening today, retreating from a 53-month high as the yen strengthened on uncertainty following the Italian elections, with shares of some big exporters to Europe tumbling. Italy's inconclusive election result sparked a selloff on world equity markets and sent safe-haven German bond yields sharply lower as investors feared a resurgence of the euro zone debt crisis.

  • Risk-off trade may pull Nifty down to 5,600 in near term, say Analysts. Inconclusive election results in Italy triggered risk-off trade in global markets. The Indian benchmarks ended with huge losses today as wary investors booked profits across the board. It is not looking like a bull market correction. It is looking like something more sinister and if you can get a 30-40 point bounce for some reason, people will come into sell, they say.

  • There is possibility of more declines in markets, says Mitesh Thacker. The fall is enjoying some strength and we are seeing 80-100 points cut coming on Nifty and you had two these kind of days in the last five sessions. What best can happen from current levels is some kind of a bounce back and given the fact that the global news flow is slightly negative, he explains.

  • 5770-5780 will provide support to Nifty, says Ashwani Gujral. But I do not think the Nifty will be able to cross 5840-5850 in a hurry, he adds. In the month of March, generally post budget, we have gone down and given that now global markets are on the downside as well, it will give added impetus on the downside," Gujral added. He is advising traders to go short on the index which can slip to 5,600-5,650 levels.

NIFTY 3-Month

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