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Market Report

Monday, 16-June-2014


  • The benchmark S&P BSE Sensex declined 37.69 points, or -0.15 per cent, to end at 25,190.48 and the NSE CNX Nifty ended 8.55 points, or -0.11 per cent, down at 7,533.55 today. Falling for the second session, the benchmark Sensex and Nifty today closed at their lowest levels in over ten days as the rupee weakened to the below 60-level and rising crude price added to concerns about inflation which surged to five-month highs.

  • Costlier crude is a double whammy for the Indian economy, which imports 80 per cent of oil supplies, as trade gap widens and threatens to push inflation higher. This will reduce room for RBI to lower lending rates in a bid to boost growth. The Wholesale Price Index-based inflation accelerated to 6.01 per cent in May from 5.20 per cent in April.

  • Adding to the data, already it has been declared that we may witness disappointing rains this season, which will add more burdens to the already higher food prices, say experts.

  • The Rupee hit 60.23 in trade today, its lowest level since May 6, after government data showed wholesale price inflation surged to a five-month high. At 14:25 pm, the Rupee was at 60.10 versus its close of 59.76/77 on Friday.

  • Asian stocks closed mixed amid an escalation of violence in Iraq. Key benchmark indices in Hong Kong, Japan and Singapore closed in the red while from China, South Korea and Taiwan finished in the green. European markets, however, were trading weak in their late morning deals.

  • Nifty may correct by more than 100-200 points before Budget 2014, says Manish Sonthalia of Motilal Oswal. I do not think Friday was a one off event and there could be some more sell off between now and the budget. The correction will last for a bit more time, though the medium to long-term outlook remains positive and one can use the opportunities to buy, he adds.

  • Buy good quality stocks as markets are poised for deep correction, says Avinnash Gorakssakar. The way the markets had gone up created an ideal scenario where a correction was due, which has now come in from the Iraq issue. My sense is that this may persist for a couple of weeks and after that clearly some solution should be worked out. In the near term, the markets could possibly look at levels of 7400 odd, but the bias remains positive and the bigger trigger for the markets, starting July, would be the upcoming budget, he adds.

NIFTY 3-Month

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