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Market Report

Wednesday, 21-May-2014

NSE

  • The 30-share Sensex, which had surged 562 points in the past four sessions, ended the day at 24,298.02, down 78.86 points or -0.32 per cent from its previous close. The NSE Nifty eased by 22.60 points, or -0.31 per cent, to close the day at 7,252.90. It touched a high of 7,287.15 and a low of 7,206.70 during the day on profit-booking amid weak global trends, and snapping the four-day rally on election euphoria.

  • The four-day rally before today's losses saw the BSE Sensex and NSE Nifty climbing to life-time high of 25,375.63 and 7,563.50 points on May 16, when the BJP-led NDA swept the polls.

  • Brokers said the market was in over-bought position following recent record setting spree on robust capital inflows on expectations of a stable government. Bourses saw emergence of selling by foreign funds after remaining major buyers for nearly one month on Indian bourses, they added. Bucking the trend, small and mid-cap stocks attracted buying.

  • A fall in rupee for a second straight day helped beaten down IT shares recoup some of their losses amid investors' frenzy to dump software stocks in favour of cyclicals such as banks and capital goods on hopes of a turnaround in the economy after pro-business BJP party was elected to power. Today, the rupee closed marginally weak at 58.64/dollar, compared with 58.6/dollar on Monday.

  • Nifty may consolidate from current levels, says Rahul Shah of Motilal Oswal Financial Services. The focus is just getting out of some of the Nifty stocks. It is shifting more onto the midsized midcap stocks. I would still like to stick to the larger players rather than getting into midsized names with no clarity on their balance sheets. PSUs are always the safer bet, he adds.

  • Markets could see a correction of 3-5%, says Mehraboon Irani of Nirmal Bang Securities. Market is poised to go up further and we are going to see much higher levels in 2014 but the general feeling is we have gone up a little bit too sharply. So there are always people who have seen a lot of pain, a lot of blood in the last five-six years and who are now making some money. There is too much of long position in the market. There could be a correction of 3-5%, but we are poised to go up, he adds.

NIFTY 3-Month

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