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Market Report

Wednesday, 18-Dec-2013

NSE

  • The Sensex closed the day at 20,859.86, up 247.72 points, or +1.20 per cent. The S&P BSE Sensex snapped 6-day fall and closed 248 points higher after the Reserve Bank of India took a proactive step and maintained status quo in its mid-quarter review of monetary policy. Also, the broad-based NSE index Nifty shot up by 78.10 points, or +1.27 per cent, to end at 6,217.15 today.

  • The RBI Governor Raghuram Rajan sprung a pleasant surprise as he kept key interest rates unchanged where the street had factored in a 25bps repo rate hike and was speculating on whether the RBI would hike cash reserve ratio (CRR), which is the minimum fraction of the total deposits which commercial banks have to keep with RBI.

  • The central bank has adopted a wait and watch approach before taking any rate action. It has cautioned that it may act and hike rates even on off-policy dates if inflation remains at elevated levels. The market now awaits the next big event: All eyes will now be on the US Federal Reserve as it is expected to issue a statement later today on its quantitative easing (QE) programme.

  • Market experts see a limited impact of QE tapering on global equities. They don't expect the US Federal Reserve to spook the Christmas rally. They see the US FED to announce tapering in January of after Ms Janet Yellen takes over as the new US Federal Reserve chief.

  • The rupee was trading higher after the RBI's announcement. The rupee was at 61.97 versus 62.01 close on Tuesday. Globally, Asian markets were trading higher with Japan's benchmark index Nikkei leading the gains on reports that the Prime Minister may shortly unveil plans to boost the economy.

  • According to analysts, market is set for a further rally if the US Fed does not begin tapering from tomorrow onwards. They expect the Nifty to test 6,220-6,250 in the near term. Ashwani Gujral is positive on the markets. In an interview to ET Now, he said that the Nifty is forming a bullish engulfing pattern which is a positive pattern. For near term, he is advising traders to go long on the market and buy January options.

NIFTY 3-Month

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