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Market Report

Friday, 06-June-2014

NSE

  • It was a historic day for the Indian markets. The S&P BSE Sensex rallied 400 points to touch its fresh lifetime high of 25,419.14 in trade on Friday. Tracking the momentum, as much as 773 stocks rose to their fresh 52-week high on the Bombay Stock Exchange. The 50-share Nifty index also rose over 100 points to touch its fresh record high of 7592.70 and as much as 449 stocks rose to their fresh 52-week high on the National Stock Exchange.

  • The S&P BSE Sensex finally closed 376.95 points higher or +1.51 per cent at 25,396.46 to a fresh closing high. The Nifty closed at 7583.40 today, up 109.30 points, or +1.46 per cent, on the back of strong inflows from foreign institutional investors on hopes of a reformist Union Budget early next month. For the year 2014, both Sensex and Nifty have already rallied over 20 per cent.

  • According to analysts, we are in a strong pre-budget bull-run and the Nifty can vault to 8,000 even before the budget is presented. They are of the view that the budget will be the first litmus test for the newly elected government and Arun Jaitley as a Finance Minister. Markets will continue to make fresh record highs supported by global liquidity and hopes of economic revival in Asia's third largest economy. India has begun the next leg upwards of a multi-year bull market and is poised to hit levels of 28-40k in next 6-24 months, they say.

  • Globally, the decision by the European Central Bank on Thursday, to cut the interest rates, is also likely to further open the floodgates for Indian stocks. The Rupee has gained marginally as RBI was spotted buying dollars through state-owned banks. The rupee is currently trading at 59.1 against the US dollar.

  • We are at the cusp of the best bull market that India has ever had in a long time, says Abhay P Laijawala of Deutsche Equities India. One of the biggest points which explain the present bull market is that economics has now become the new politics in India. Up until now, reforms in India have been thrust upon us and as a country we have only embarked on reforms when there was either a risk of sovereign rating downgrade or we have to go under an IMF restructuring programme as in 1991. We are looking at the Sensex to scale 8000 points by the year-end. It was 20,000 in December, and our target for the Sensex is 28,000 by December, he added.

  • It still looks like a good market to buy into and given that we are coming out of a consolidation that means moving up in a trended fashion will be easier from here than it was in the last 15 odd days, says Ashwani Gujral. Chances are this rally will continue and we should go towards 8,000-8,100, he adds.

NIFTY 3-Month

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