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Market Report

Friday, 23-May-2014

NSE

  • The 30-share Sensex opened on a strong footing and rose to day's high of 24,745.86 points. It concluded the session at 24,693.35, a new record at closing, by rising 318.95 points or +1.31 per cent, boosted by a spike in SBI after its earnings and heavy buying in power shares on hopes of a big push under the incoming Narendra Modi-led government. It surpassed previous record closing of 24,376.88 reached on May 20.

  • Likewise, the NSE barometer Nifty jumped 90.70 points, or +1.25 per cent, to close at a yet another record of 7,367.10, surpassing its previous high of 7,276.40 hit on Thursday. The optimistic cues from the global front would have also contributed to the positive mood on Dalal Street. But there has been a sea change in the trading sentiments, with investors seen to accumulate small and mid-cap stocks.

  • Financial major Goldman Sachs said a clear mandate for the BJP has rekindled hope for structural reforms and better investment climate and the country's growth is likely to accelerate to 6.5 per cent in FY16. FIIs seem to have returned with faith as they were net buyers today. The rupee surged to trade at fresh 11-month high of 58.37 in late afternoon trade. It had closed at 58.47 yesterday.

  • In economy-related news, Deutsche Bank downgraded Indian stocks to "neutral" from "neutral/overweight" relative to other global emerging markets, saying valuations appear "very stretched" against lower GDP growth. The Nifty has risen 24.4% since Sept. 13 when Narendra Modi was declared as BJP's prime ministerial candidate.

  • Investors expect a big bull run to be just around the corner, says Yogesh Mehta of Motilal Oswal Securities. To a certain extent, we saw a good run-up post the election results on May 16. But after that, we have seen many sectoral switches within the large caps. The focus has now shifted towards midcap and small cap companies. Those are quality buys. That is the reason why we are seeing the exhaustion on the large cap front. Midcaps and small caps will now shine, he says.

  • Till the end of the May series, we believe market may move in a broader range of 7150 on the lower side and 7450 on the higher side, say experts. Traders have been mostly unwinding their positions in options segment and these are mainly domestic participants who have been betting on big moves post election verdict in anticipation of favourable outcome. Though FIIs have been selling in the cash market since the last few days, we believe it's more of profit booking in arbitrage positions rather than selling of portfolio. They have been going long in index futures, but the quantum of buying is not very significant to lead to fresh breakouts in market, they add.

NIFTY 3-Month

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