IntradayTrade dot Net
Market Report

Tuesday, 16-July-2013

NSE

  • Sensex, the 30-share index, commenced the day's trade weaker by a whopping 368 points from its previous close at 19,665.57. It, however, trimmed some of the losses during the day and closed lower by 183.25 points, or -0.91 per cent, at 19,851.23 today. Similarly, the wide-based National Stock Exchange index Nifty lost 75.55 points, or -1.25 per cent, to close at 5,955.25 today after Reserve Bank's steps to quell rupee's volatility sparked concerns of rate hikes.

  • Brokers said the trading sentiment, mainly in banking and financial sector stocks, was dampened after RBI announced a slew of measures to curb rupee's volatility late last night, including hiking the lending rates for banks and sucking up of Rs 12,000 crore, to make the currency dearer. This also raised concerns of RBI increasing interest rates, rather than cutting rates, in its first quarter monetary policy review later this month, they said, adding that a weakening trend in the overseas markets as German investor confidence unexpectedly dropped, also hit the trading sentiment.

  • Meanwhile, rupee appreciated by a hefty 68 paise to 59.21 against the dollar intraday today, clearly indicating that the RBI steps have been able to rescue the Rupee, while the stock market has suffered.

  • On the global front, major Asian markets ended marginally lower except for the Nikkei which gained 0.4%. European share which had opened firm, have given up most of the early gains. Global cues, however, had no effect in our market today.

  • In another significant development after market hours today, the government today liberalised FDI limits in a dozen sectors, including allowing 100 per cent in telecom to boost the sagging economy. FDI cap in insurance sector has been raised from 26 per cent to 49 per cent under automatic route under which companies investing do not require prior government approval. It was also decided to allow 49 per cent FDI in single brand retail under the automatic route and beyond through the Foreign Investment Promotion Board (FIPB). In basic and cellular services, FDI was raised to 100 per cent from current 74 per cent. Of this, up to 49 per cent will be allowed under automatic route and the remaining through FIPB approval. FDI cap for civil aviation was, however, left unchanged at 49 per cent. No view was taken on relaxing FDI caps in airports, media, brownfield pharma and multi-brand retail. All these will definitely have a positive effect in the stock market tomorrow.

  • The Nifty continues to maintain upside bias as long as we remain above 5900, says Ashwani Gujral. It is basically a market of stocks rather than a stock market and you have two distinct directions that certain sectors are taking. There is one part, which is IT, pharma and FMCG. There is another part, which is banking, growth stocks, infrastructure, capital goods, etc. Bank, capital goods etc will continue to underperform, move lower. Meanwhile, you will see new highs on FMCG, pharma and IT. So on days when banks are flat, the market will most likely move higher, maybe around 6000-6100. When the rest of the market also tops out, the entire Nifty will come down towards 5500-5600. So in this leg of the market, banks will continue to underperform, he explains.

NIFTY 3-Month

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