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Market Report

Wednesday, 12-June-2013

NSE

  • In volatile trade, Sensex, the 30-share index commenced the day on a weak note and improved during intra-day to 19,143.13 with rupee improving against the dollar. However, it failed to carry the momentum and closed 101.87 points, or -0.53 per cent, down at 19,041.13 today, its lowest level since April 18. Similarly, broad-based National Stock Exchange Nifty setled lower by 28.60 points, or -0.49 per cent, to close at 5,760.20 today as weak factory output and sticky inflation dented hopes of a rate cut by RBI next week.

  • Brokers said the trading sentiment dampened after industrial output growth slowed to 2 per cent in April and retail inflation dropped marginally to 9.31 per cent in May from 9.39 per cent in April. They said a weakening trend in global markets on concerns that central banks from Tokyo to Washington increasingly reluctant to add stimulus, further influenced the market.

  • While the concerns remains on a rate cut by the Reserve Bank of India next week, analysts are expecting the central bank to go ahead with a 25 bps points. The rupee correction is also seen as overdone and a strong pull-back is anticipated. With monsoon progressing well, there are hopes of inflation easing further. In a big shot in the arm for the Indian equities, rating agency Fitch has upgraded India's rating to 'Stable' from 'Negative.' It has affirmed India's rating at "BBB-".

  • Investors will now focus on Friday's wholesale price inflation (WPI) data which is expected to remain in the central bank's comfort level of 5 per cent. An easing inflation will provide RBI more elbow-room to reduce interest rates in the June 17 monetary policy review.

  • Asian stocks pared most of their morning losses but closed on a negative note amid looming fear over scale-back of US Federal Reserve bond-buying plan. European shares were trading lower when reports last came in.

  • Nifty should test 5680-5650 levels in a day or two, says Sandeep Wagle. So rate sensitives, other than pharma you will have all round fall or a correction to the tune of another 5-7-8% is what I would talk of and Nifty should test 5680-5650 in a day or two, he says.

  • There is overall weakness in the market, says Ashwani Gujral. Tech stocks came down but banking stocks did not go up which means that there is overall weakness in the market and now the large players are trying to sell down. I do not think Nifty has even started any kind of pullback. It is still in the negative because people realise that rupee trend will not be reversed so easily, he says.

  • To Intraday Traders, particularly, we would like to point out two disturbing factors - both visible in our 'Market Statistics' page. First, the big declines in the last two sessions have been with high volumes. Much more than the average of the last few days. And, Second, FIIs have now turned net sellers in the Indian markets. In fact, FIIs have started reducing their holdings in India as far back as the end of last month. This is what the figures say. And this is disturbing and pointing towards a sell-off. So, be careful.

NIFTY 3-Month

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