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Market Report

Tuesday, 01-Apr-2014

NSE

  • Nifty, the 50-share index, ended at an all-time high of 6,721.05, up 16.85 points or +0.25 per cent. It touched a high of 6,732.25 and a low of 6,675.45 in intraday trade today. The S&P BSE Sensex closed at record closing high of 22,446.44, up 60.17 points or +0.27 per cent. It touched an all-time high of 22,485.77 and an intraday low of 22,295.65 in trade today.

  • The indexes pared intraday losses and closed at a fresh all-time closing high as rate sensitives ended in the red because the Reserve Bank of India maintained status quo on interest rates. The RBI has left repo rate at 8 per cent, reverse repo rate at 7 per cent and CRR at 4 per cent.

  • Following the policy statements, analysts are of the view that there will be no rate cuts in the near term as the governor sees the risk of retail inflation. In fact they are of the view that once elections are out of the way, the central bank may in fact hike interest rates.

  • Goldman Sachs believes that RBI's overall tone on inflation is hawkish and sees upside risks to the RBI's inflation trajectory for FY15. It expects the central bank to hike interest rates by another 50 bps in 2H 2014.

  • Globally, Asian shares hit a four-month high today after dovish comments from Federal Reserve Chair Janet Yellen and China's official PMI survey showing the manufacturing sector managed to continue expanding in March. In Europe markets opened higher with all the major indexes in green.

  • Today's status quo by RBI is a bad gesture and it will impact the rally and inflows into stock markets, say experts. The markets have been rallying, most experts say, on hopes of a reform-oriented government at the Centre post elections. According to them, it is a pre-election rally that is seeing Sensex and Nifty make record highs almost every other day. The trend has been like this since results to assembly elections were announced in December last year. A signal from the RBI could have added to the rally for sure.

NIFTY 3-Month

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