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Market Report

Thursday, 30-Jan-2014

NSE

  • The benchmark Sensex, which tumbled to 20,343.78 intra-day, saw some fag-end buying that helped halve losses. It settled at 20,498.25 today -- a level seen on November 27 -- down 149.05 points or -0.72 per cent from Wednesday's closing level. In five days, the Sensex has tumbled 875 points from 21373.66 on January 23.

  • The 50-scrip NSE Nifty index fell 46.55 points, or -0.76 per cent, to close at 6,073.70 today, after touching a low of 6,027.25 on fears of capital outflows from emerging markets after the US Federal Reserve further cut its stimulus, extending the decline for the fifth day. The sharp rise in the last few minutes of trade today proved that the Fed withdrawl has now been discarded by the market.

  • The Fed, the US central bank, yesterday said it would reduce its massive bond-buying programme by USD 10 billion a month to USD 65 billion, citing a pick-up in the US economy. The move, which follows a similar announcement in December 2013, stoked fears of capital flows from emerging markets as the US Fed gradually winds down it stimulus.

  • Selling due to expiry of monthly equity derivatives amid a weak global trend also affected the sentiment, traders said. The poor show by Indian indices was in line with falling Asian stock markets, extending a global rout on renewed fears about emerging economies after the Fed cut.

  • The Rupee continued to remain weak following the US Fed's decision to further tapering of $ 10 billion. The first round of tapering of an equal quantum was announced last month.

  • Meanwhile, the Finance Ministry today in a statement assured investors and market participants that the fundamentals of the economy are strong and they should not have any worries over external factors viz. fed taper. The ministry said that it will take necessary steps along with the RBI to ensure stablity in the financial markets. This led to a recovery late in the day.

  • According to analysts, strength in US economy augurs well for emerging market economies like India considering the fact that it is more of a consumption-driven economy and considering China is showing signs of slowdown, India is best place to attract demand as developed economies shows strength and demand improves.

NIFTY 3-Month

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