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Market Report

Monday, 16-Sept-2013

NSE

  • After climbing to 20,086.43 at the outset, Sensex, the BSE benchmark, finally closed at 19,742.47, up just 9.71 points or +0.05 per cent compared to Friday's closing value. The Sensex today wiped out over 350-point rise in early trade. The broad-based National Stock Exchange index Nifty fell by 10.05 points, or 0.17 per cent to 5,840.55 today. The index moved to 5,957.25 and 5,798.15 intraday in a volatile session as a pick-up in August wholesale inflation dashed hopes of RBI cutting rates later this week. The Nifty slipped below its crucial psychological level of 5900 and shut shop around its 200-DMA.

  • Traders said besides dashed rate cut hopes, concerns that the central bank may not wind down its liquidity-tightening measures also was a factor in investors selling off positions. Our market was hit hard by profit-booking as costlier onion and other vegetables pushed up inflation for the third month in a row to 6.1 per cent in August.

  • Brokers said selling pressure remained strong enough and domestic markets ignored a firming trend in the Asian region as well as a higher opening in Europe today. Global stocks rose on reports that former US Treasury Secretary Lawrence Summers, who was said to be in the race to replace Fed Chairman Ben Bernanke in January next year, has pulled out of the race for the top job.

  • Meanwhile, the US Federal Reserve Open Market Commitee (FOMC) meet on September 17-18 will be key in terms of any tapering of $85 billion monthly bond purchases that led to significant inflows in the emerging markets especially India so far. True, it seems that the Fed tapering fears have been factored in by the markets. And unless there a big surprise from the US Fed, the markets may not react to that at all. In fact, past track record of the US Federal Reserve suggests that it will not do anything which will destabilise the financial markets overnight.

  • We were staring at about 6,000 levels on the Nifty this morning when we opened for trade, but the devil came in form of the WPI numbers post that we have seen a good amount of correction coming in, said Gaurang Shah of Geojit BNP Paribas Financial Services. With numbers at 6.1 WPI there is absolutely no elbow room for the RBI Governor to do any kind of relaxation in terms of interest policies, etc, he added.

  • Don't expect Nifty 6000-6100 levels to be crossed in near term, says Sandeep Wagle. And the next move towards a new high is not expected at least in a month or two, he adds.

NIFTY 3-Month

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