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Market Report

Thursday, 20-Feb-2014

NSE

  • After gaining nearly 530 points in the past four sessions, the Sensex dropped 186.33 points, or -0.90 per cent, to 20,536.64 as recent gainers in the banking, metal and oil & gas packs ended in the red. The 50-scrip NSE index Nifty dropped 61.30 points, or one per cent, to end at 6,091.45 today. In the past four days, it had gained over 150 points.

  • The markets fell for the first time in five days to end lower today on broad-based selling after global markets slipped amid downbeat Chinese manufacturing data and fears of more US stimulus cuts.

  • Global stocks witnessed a volatile session after HSBC and Markit Economics said their index of Chinese manufacturing fell to 48.3 from January's final figure of 49.5. A number below 50 indicates contraction. The Chinese data spooked investors who were nervous after minutes of the US Fed's January gathering released yesterday showed several policy makers were in favour of stimulus cuts.

  • There could be some volatility in the market because of liquidity concerns due to QE taper, but I do not see a situation where that will dominate the behaviour of the financial markets, says Sukumar Rajah of Franklin Templeton Investment. Ultimately, the earnings prospects, the trend in earnings and improvement in fundamentals would play a more important part, he says.

  • A 10 per cent fall or rise in stock markets can come if we see stoppage of redemptions in emerging markets, says Anish Damania of IDFC Securities. With increased affinity to India, we would see allocations continue to India and FII flows continue to be high. But if there's a selloff, there is less likely chance that you will see a positive move in the market till the time the elections go through, he adds.

  • Talking on how elections may not prove to be a big market mover, Jyotivardhan Jaipuria of BofAML said, Ultimately, it is still earnings which will drive your stock market. The best stock market returns in any government has actually come in a third front government. Between 1989 to 1991 when we had two prime ministers in two years, the government lasted for a total of two years; that gave the best stock market return ever in any government. So, we should love a third front government in that case, he says.

NIFTY 3-Month

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