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Market Report

Monday, 12-Aug-2013

NSE

  • Sensex, the 30-share index, which had gained 124.46 points in the previous session, rose further by 157.64 points, or +0.84 per cent, to 18,946.98 today. Intra-day, it had touched 19,066.97. Today's gain was Sensex's best since 179.6 points on July 18. The broad-based National Stock Exchange index Nifty rose 46.75 points, or +0.84 per cent, to cross the key 5600-mark. It ended at 5,612.40, led by metal, FMCG and healthcare stocks amid encouraging trade data and hopes of more steps by government to support the weak rupee.

  • In late trade, the S&P BSE Sensex pared some gains to close below its key psychological level of 19,000; while the 50-share Nifty closed above 5,600 levels. Analysts say the bounce-back is more technical in nature, as most of the indicators are in the oversold zones. However, they remain bullish on the stock market.

  • Brokers said the market was in oversold zone following recent bearish phase and investors indulged in picking fundamentally strong stocks available at attractive levels. Analysts said expectations are high that the government and the RBI will come out with a raft of measures to support the rupee and instill confidence in the markets.

  • Indian Rupee, the worst currency of Asia so far this year, pared its intra-day gains after the Finance Minister failed to provide details of measures to protect rupee. The currency traded at 61.06 a dollar from Friday's close of 60.88 at the Interbank Foreign Exchange Market. Reports suggest that the government may soon relax borrowing rules for debt-laden Indian companies including doubling the amount a firm can borrow overseas to $1.5 billion. The Reserve Bank today announced that it will sell government bonds worth Rs 22,000 crore every Monday to check volatility in the forex market.

  • Gains in the market were, however, capped after SBI shares slipped by over 3.4 per cent on dismal earnings. Meanwhile, exports grew by 11.64 per cent to USD 25.83 billion in July, snapping two consecutive months of decline. And, post market hours, the Index of Industrial Production (IIP) for the month of June contracted at (-)2.2% versus (-)1.6% in May. This is the second straight contraction in industrial production, underscoring the challenge for policymakers to stabilise the battered rupee without hurting economic revival.

  • Also, post market hours, Retail inflation marginally declined to 9.64 per cent in July from 9.87 per cent in the preceding month as prices of cereal, pulses, fruits and sugar softened. The consumer price index-based inflation had been falling for three consecutive months before June. The food inflation in July softened to 11.24 per cent from 11.84 per cent in the previous month, according to the official data released today.

  • Globally, Asian shares traded firm as Chinese stocks surged to a 3-1/2 week high as investors took heart from last week's encouraging data from the world's second-biggest economy. However, Japan's Nikkei declined 0.7% today. European stocks fell from a 10-week high as a report showed Japan's economy grew less than forecast last quarter.

  • Indian stock markets all set for a bounce-back, say analysts. Breather rally round the corner, Nifty may hit 5700. The key trigger to push forward this pullback will be rupee, which is likely to appreciate in short run. The daily chart of the Nifty clearly shows that the market is critically poised near the weekly swing low at the 5477 mark. The growing clamour of a reversal of fund flow from developed economies to emerging economies, only reinforces the bullishness, they say.

NIFTY 3-Month

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