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Market Report

Tuesday, 03-June-2014

NSE

  • Sensex, the 30-share barometer, spurted by 173.74 points, or +0.70 per cent, to close at record 24,858.59 points, surpassing previous all time high of 24,716.88 reached on May 26. Similarly, the 50-share Nifty of the National Stock Exchange also closed at record 7,415.85 points, up by 53.35 points, or +0.72 per cent, as RBI injected liquidity into the markets while keeping key rates unchanged.

  • As expected by market participants, RBI kept policy rates and CRR unchanged but cut the statutory liquidity ratio (SLR) for banks by 0.50 per cent. Thus, the central bank, in its second bi-monthly monetary policy statement for 2014-15, unlocked about Rs 40,000 crore of banking fund by reducing SLR to 22.5 per cent.

  • Among global markets, Asian shares rode higher today, supported by solid US and Chinese data. European markets were down up to 0.33 per cent in early trade, on expectations of fresh monetary easing by the European Central Bank. Metal stocks turned investors' fancy after surveys showed China's factory and services sectors had their best showings in months in May.

  • Market will go from strength to strength in coming few weeks, says Devang Mehta of Anand Rathi Securities. Over the last two-three days, some of the stocks which have underperformed - the likes of FMCG or IT - had started to outperform. So it is not that the market is correcting. It is just that sectors are getting churned, and again and again buying is emerging in typical cyclicals, he adds.

  • Expect market momentum to continue till budget, says Dilip Bhat of Prabhudas Lilladher. There was quite a strong momentum in the markets, leading to the credit policy. I anticipate a similar run-up till the budget, where a lot of rumours will fly thick and thin. The big trigger will be the budget. At least till then, markets will hold the level and the scenario will still be buy on dips, he said.

  • Swiss brokerage UBS Securities is bullish on Indian equities and has set a Nifty target of 8,000 points for end-2014. There could be an upside to this target based on how policy-making evolves over next few months. While markets can always take a breather as investors await actual reforms as well as real impact on economy, as seen in Japan/China, we think any such dips could prove to be a buying opportunity, says a report from UBS.

NIFTY 3-Month

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