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Market Report

Wednesday, 04-Sept-2013

NSE

  • After a steep fall of nearly four per cent in the previous session, the Sensex spurted by 332.89 points, or +1.83 per cent to 18,567.55 on funds buying, as investors judged yesterday's sharp fall as excessive. On similar lines, the broad-based National Stock Exchange index Nifty jumped up by 106.65 points, or two per cent to 5,448.10 backed by stocks of metal, pharma and auto sectors, in step with the recovery in the rupee.

  • Slight recovery of rupee along with appointment of new RBI Governor Raghuram Rajan, boosted the market sentiment. RBI was seeing taking fresh measures to curb currency weakening. Value buying after yesterday's panic selling also helped the market to recover, said experts. The rupee, which fell to intra-day lows of 68.6 levels, was trading at 67.1 levels against dollar on suspected RBI intervention.

  • In order to encourage capital flows, the RBI today eased the external commercial borrowing norms by allowing companies to use funds raised from foreign partners for general corporate purposes.

  • Globally, Asian stocks fell, snapping the longest rally in three weeks, and emerging-market currencies weakened on concern the US is moving closer to striking Syria. European stocks retreated as Ryanair Holdings Plc led a decline by travel and leisure companies. Investors are now keenly awaiting the Bank of England and the European Central Bank interest-rate decisions tomorrow for further cues.

  • Morgan Stanley, the global brokerage firm, is of the view that earnings growth of Sensex companies are likely to take a hit in FY14 and FY15. Given the tail risks, Morgan Stanley underscores its bear case and sees a 14% fall in the Sensex, with a 35% probability of 15,700. We cut our Sensex earnings growth estimates from 10.5% to 4.1% for FY14 and from 19.0% to 12.7% for FY15. We issue a new 12-month forward Sensex target of 18200, Morgan Stanley said in a report.

NIFTY 3-Month

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