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Market Report

Thursday, 19-Sept-2013

NSE

  • The BSE Sensex rallied over 700 points in trade to touch its highest level in 34 months. The S&P BSE Sensex ended at 20,646.64, up 684.48 points or +3.43 per cent for the first time since November 10. It touched a high of 20,739.69 and a low of 20,347.30 in trade today. The Nifty posted highest close since May 30 and hit a 3.5-month high. The index closed at 6,115.55 today, up 216.10 points or +3.66 per cent. It touched a high of 6,142.50 and a low of 6,040.15 in intraday trade today.

  • The S&P BSE Sensex rallied above 20500 today, while Nifty reclaimed its crucial level of 6100 to post its best percentage gain since May 18, 2009, led by a sharp short covering rally after the US Federal Reserve postponed winding down of its massive monetary stimulus. Volumes were very, very high and FII participation was massive in today's rally driven by strengthening rupee and a firming global trend. See our 'Market Statistics' page.

  • Benchmark indices have closed the session on a strong note led by financial and FMCG shares on expectation that fund flows into emerging markets including India would continue as the US Federal Reserve's surprisingly decided to continue its stimulus programme. In the process, the investor wealth in our markets rose by a whopping Rs 1.83 lakh crore to Rs 66.53 lakh crore.

  • Globally, from Jakarta to Manila, Tokyo to Sydney investors celebrated the prospect of prolonged stimulus in the world's largest economy. Most market participants were expecting the US central bank to begin a withdrawal of the bond-buying programme by about $10 billion a month.

  • Now, all eyes are on Raghuram Rajan and what policies he doles out in his first policy meeting on Friday, 20 September to kick start growth in Asia's third largest economy. Analysts are expecting the Reserve Bank of India will maintain a status quo policy and it's the FII inflows that will drive the market tomorrow. Analysts are expecting the RBI to announce roll back in the MSF rates, and that may provide further upside to the market.

  • Since the last policy review of RBI at end-July 2013 economic data has continued to provide space for RBI to ease policy, said Motilal Oswal of Motilal Oswal Financial Services. RBI can withdraw fully or partially some of the extraordinary liquidity tightening it had done to support INR including ceiling on LAF and steep hike in MSF. As a first measure it can ease MSF by 50bp with a timeline for further reduction, consistent with the promise of transparent and predictable course of policy articulated by Dr. Rajan. Fastening financial sector reforms too would act as confidence and growth booster, he said.

NIFTY 3-Month

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