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Market Report

Monday, 16-Dec-2013

NSE

  • After shedding 281 points last week, the Sensex fell further by 56.06 points, or -0.27 per cent to end at 20,659.52 today. The broad-based National Stock Exchange index Nifty fell by 13.70 points, or -0.22 per cent, to close at 6,154.70 today, after touching the day's high of 6,183.25 as November WPI inflation data cemented fears of a rate hike by the RBI in its policy review meeting this week.

  • Costly vegetables, particularly potato and onion, pushed the November wholesale inflation to a 14-month high of 7.52 per cent. Last week, government data showed November retail inflation spiked to above 11 per cent.

  • Market participants are widely expecting a 25-bps point repo-rate hike on December 18 policy, taking the repo rates to April 2012 levels. Market is most likely to ignore a 25bps rate hike which is largely expected after november inflation figures dissapointed, but a steeper rise could be hazardous in the short-term. Apart from the rate hike, market participants will closely watch the future commentary by the RBI governor. And a hawkish commentary might lead to further weakness in markets, say experts.

  • A weakening trend in Asia after Chinese manufacturing data missed market estimates and speculation that the Federal Reserve might taper its stimulus this week, also affected domestic activity, dealers said.

  • Investors are waiting to see whether US Federeal Reserve decides to scale back its bond-buying program earlier than scheduled, which could lead to a significant correction in emerging markets, including India, in the short-term and dampen the festive spirit too. The Fed will hold its two-day Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday, followed by a press conference by Fed Chairman Ben Bernanke before our market opens on Thursday.

  • In all this trouble, there are two pieces of good news: the Rupee is recovering and FIIs haven't abandoned us. See our 'Market Statistics' page. As of now, Dalal Street is cautiously optimistic, and waiting for two immediate triggers that may cause panic, starting Wednesday.

NIFTY 3-Month

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