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Market Report

Monday, 23-Sept-2013

NSE

  • After losing 383 points in the previous session as Reserve Bank of India unexpectedly hiked repo rate by 0.25 percentage points, the S&P BSE Sensex slipped below its crucial psychological levels of 20,000 in trade on Monday with rate-sensitive stocks leading the fall. The index finally ended at 19,900.96 today, down 362.75 points or -1.79 per cent. It touched a high of 20,199.81 and a low of 19,826.30 in trade today.

  • Similarly, the National Stock Exchange index Nifty dropped by 122.35 points, or -2.04 per cent, to close at 5,889.75 today, after touching the day's low of 5,871.40. It had lost 103.45 points in the previous session. The Nifty fell for the second day in succession as investors continued to unwind positions in banking, realty and capital goods stocks on heightened fears that the RBI will hike repo rates further to curb inflation.

  • The Rupee remained weak through the day due to month-end dollar demand from importers. At 1600 hrs, the rupee was trading at Rs 62.63 compared with Friday's close of Rs 62.28 per dollar. The market sentiment was also tepid ahead of the expiry of monthly derivative contracts on Thursday, traders said.

  • Absence of clear direction from overseas markets with Japan and Hong Kong markets being closed for a public holiday, and mixed trend in Europe also forced funds to reduce their positions in India, brokers said. US stocks opened mixed as traders balanced upbeat data from Germany and China with angst about the timing of Federal Reserve tapering.

  • Bank of America Merrill Lynch in a report issued on Monday morning stated that markets will remain in 18,500-20,500 range as weak economic and earnings growth caps the upside while hopes of rate cuts and policy measures protect the downside.

  • I do not know why there is so much of hue and cry about repo rate being increased, because the operating rate is the marginal standing facility rate and cost of funds for banks has actually come down on an incremental basis, with asset quality concerns not being changed prior to the RBI policy, says Manish Sonthalia of Motilal Oswal AMC. So on a net-net basis, I do not feel too bearish about the markets hereon, he adds.

  • Though the index is still up nearly 9 per cent so far in the month of September, as of data collected on September 22, the sentiment is clearly bearishm say experts. We are still making a higher top higher bottom in the charts. Only if 5800 is broken will we think of being bearish to the level of 5500-5450, they added.

NIFTY 3-Month

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