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Market Report

Tuesday, 13-May-2014

NSE

  • The Nifty soared for the 4th day in row and closed at all-time closing high of 7,108.75 today, up 94.50 points or +1.35 per cent. It retreated from all-time high of 7,172.35 in intraday trade today. The Sensex raced past 24,000 mark in an across-the-board rally. The 30-share index ended at all-time closing high of 23,871.23 up 320.23 points or +1.36 per cent. It touched an all-time high of 24,068.94 and a low of 23,871.23 in trade today.

  • The bull-run in the Indian market continued and the benchmark hit record highs after exit polls predicted a comfortable majority for the NDA to form a government after Lok Sabha elections. The CNN-IBN-CSDS exit poll has predicted 270-282 seats for the NDA. The India Today-Cicero poll expects 261-283 seats, ABP-Neilson sees the NDA bagging 281 seats and Times Now-ORG sees the saffron alliance winning 249 seats.

  • The upsurge was helped along by very high volumes today, both from FIIs and retail traders. See our 'Market Statistics' page. Also note that in the meantime March IIP has contracted by 0.5% and April CPI has inched up to 8.59%. These facts have been completely ignored by our markets in the euphoria of exit polls.

  • The Rupee gained sharply against the dollar after the exit polls. Global help was also at hand as Asian markets ended higher, shrugging off the events in Ukraine, tracking overnight gains in the US stock markets. The shares in Europe firmed up, tracking solid gains in US equities on Monday and driven by upbeat earnings from large corporates in the region. US stocks rose modestly on Tuesady, with the Dow and S&P 500 both inching to record levels despite economic data that painted a mixed picture of the economy.

  • Even after rallying over 13 per cent so far in the year 2014, most analysts expect the euphoric rise on the S&P BSE Sensex to continue for the rest of the year as well, cemented by hopes of a stable and reform-oriented government at the Centre. And even if there are some bouts of profit taking after the results on 16 May, analysts advise investors to stay long as the monster rally is yet to come in. The Sensex is expected to rally another 2500-3000 points by December-end and the 50-share Nifty index should hit the levels of around 7800-8000.

  • Expectations of a stable, reform-oriented government could continue to lead to strong foreign flows into Indian equities. India has received only US$5.5 billion in equity inflows year-to-date, compared to an average of US$22 billion in 2012 and 2013. Raamdeo Agrawal of MOFSL is of the view that FII inflows into Indian equity markets are going to increase multi-fold if we get a good mandate. We are going to see sustained inflow because in terms of emerging markets, there are not many places where they can go. China is out of favour, Russia is not happening, and Brazil has gone nowhere, he added.

NIFTY 3-Month

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