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Market Report

Monday, 12-May-2014

NSE

  • The Nifty ended at a record closing high of 7,014.25, up 155.45 points or +2.27 per cent. It touched an all-time high of 7,020.05 and a low of 6,862.90 in intraday trade today. The S&P BSE Sensex surged 5.39 per cent in two trading sessions and posted best two-day rally since July 2009. The index ended at all-time closing high of 23,551.00, up 566.77 points or +2.42 per cent. It touched an all-time high of 23,571.68 and a low of 23,008.65 in trade today.

  • The final phase of polls for 41 constituencies comes to an end today and exit polls will start trickling in at 6:30PM. The polls results will be announced on Friday, May 16, 2014. The benchmark indices surged for second consecutive session in anticipation of BJP-led NDA winning a comfortable majority in the 16th Lok Sabha elections. Ahead of the Exit Poll, the benchmark indices have rallied to record highs in anticipation of a stable government.

  • Further, the government will also release index of industrial production numbers for March and the rate of inflation based on the Consumer Price Index for April after market hours today.

  • The rupee continued to strengthen against the US dollar and hit a 10-month high on hopes that the exit polls would show that the opposition Bharatiya Janata Party would come to power in the general elections.

  • The Nifty has given a breakout from an ascending triangle which had formed on the monthly charts, says Salil Sharma. This is a bullish long term breakout which gives a target of 7600 in the next six months and therefore the short seller needs to stay out of the market. If the trader is already long in the market then he should continue to ride his profits, he adds.

  • The Nifty gave a sharp breakout on Friday when it bounced back from its strong support at 6660. In a single day it crossed its resistance at 6750 and 6870. Now it has crossed a lifetime high of 7020. The suddenness of the move has surprised most of the Nifty traders. This move has forced a number of short seller and fence sitters to go long ahead of the exit poll's results which would be declared on Monday evening, say experts.

  • There is a high chance of a sell-off after the election, with people taking money off the table, says Tarun Kataria. If the outcome is really not what people expected, we expect in the next 10 days to see some kind of sell-off which again could be another buying opportunity. Remember that a lot of this money is FII money that comes in, and as the saying is, you sell in May and go away. But that impact has not really happened yet. So you can expect to see something that will trigger this thing on the wrong foot if you will, but long term with the right election outcome, you got a run from here, he adds.

  • NDA at 240 seats will see Sensex at 27,600; below 220 seats, index may slip to 18K, say Brokers. The news channels are expected to start flashing exit polls after 6:30 pm today. Remember, the exit polls in India have been way off the mark. In 2004 and 2009, pollsters underestimated Congress seats and overestimated BJP seats. Pollsters also failed to predict seats that were won by parties not part of the two major coalitions.

NIFTY 3-Month

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