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Market Report

Monday, 03-Feb-2014

NSE

  • The Sensex dropped 304.59 points, or -1.48 per cent to end at 20,209.26, the weakest level since 20,217.39 on November 22, 2013. This was the sixth drop in seven sessions. On Friday, it gained 15.60 points while in the previous 5 days the index plunged 875.41 points.

  • The 50-share NSE index Nifty intra-day dipped below 6,000 level. It ended at 6,001.80, down 87.70 points, or -1.44 per cent which is its lowest close in over 10 weeks today on across-the-board selling in bluechips, amid weak global cues and worries after the US Federal Reserve's stimulus cut.

  • Brokers said the foreign investors offloaded their positions after reports of slowing manufacturing in China, the world's largest user of metals. Investors seemed to ignore data showing that India's manufacturing sector in January expanded at the strongest pace in the past 10 months. They said the fund managers were also worried over the US Federal Reserve's decision to further cut monetary stimulus by $10 billion per month will tighten capital inflows into emerging markets like India.

  • The rupee turned marginally lower as state-run banks were seen buying dollars to likely to meet defence needs, foreign banks took cover ahead of RBI's reference rate setting. The rupee is trading at 62.75 compared with its previous close of 62.68, after rising to 62.56 in early trades.

  • Stocks in Asia ended lower with trading holidays in some markets. Japan's benchmark share index the Nikkei dropped to a new 2-1/2 month low today, extending losses for third straight day as investors remained cautious on weak economic data from China and ahead of the US jobs data. Stock markets in China, Hong Kong and Taiwan were closed on account of Lunar Year holidays.

  • The markets seem to have come under the grip of bears, with analysts expecting another 10% correction from here. Some experts however see this as a temporary correction. They feel the markets would rally more than 10% ahead of elections. Up to the general elections, my sense is that there will be a massive rise in the market and that rise to my mind could be somewhere closer to 6,800 levels or so for the Nifty, says Piyush Garg of ICICI Securities.

  • People are expecting that elections would bail out this market. Now, if the liquidity environment changes I do not think you will get rallies into the elections. Once the market breaks daily and weekly pattern, the trend is down. The market now needs to prove whether it can start an uptrend at some point, said Ashwani Gujral.

NIFTY 3-Month

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