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Market Report

Wednesday, 09-July-2014

NSE

  • Nifty, the broader NSE index, notched up a second consecutive session of losses, ending down -0.50 per cent, or 38.20 points, to close at 7,585.00 today. That marked its lowest close since June 27, pushing it to below its 20-day moving average. Sensex, the benchmark BSE index, fell -0.54 per cent, or 137.30 points, to end at 25,444.81 today, its lowest close since June 30.

  • The indexes sank to its lowest level in nearly two weeks, continuing to retreat from the record high hit in the previous session, as investors pared positions in blue-chips such as Tata Motors ahead of the federal budget. Risk aversion was also seen ahead of Infosys Ltd kicking off the April-June earnings season on Friday, while weak global stocks on the back of data showing cooling Chinese inflation also dented sentiment.

  • India's Economic Survey, unveiled on Wednesday, failed to bring any cheer for the market participants and called for tough measures to shore up public finances and reduce inflation, reinforcing hopes that Prime Minister Narendra Modi and Finance Minister Arun Jaitley will deliver a non-populist, prudent budget tomorrow.

  • But some analysts also warn that investors may be expecting too much out of the budget and worry markets could be hit at any hint of disappointment. Expectations are running very high, but as is often the case in India -- wishes are being confused with expectations.

  • Dalal Street may be headed for a big correction, seen slipping 10% before next bull run. This is the beginning of a correction after we have been going up relentlessly from September. The index is almost up 30 per cent plus. There have not been a serious correction and it is perfectly fine as there has been some amount of froth in the market, said Dipan Mehta, Member, BSE and NSE.

  • Traders should be ready to brace for more correction as this is just the beginning, says Ashwani Gujral. This is the beginning of a big correction and it will not get turned by any kind of Budget, he added. Gujral is of the view that we will get closer to the 7200-7300 zone before the correction is over. The main point here is that the market is extremely over bought and it now needs a serious correction before the next leg of the bull market and in this process easily a 10 per cent decline can and should be expected, he concludes.

NIFTY 3-Month

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