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Market Report

Friday, 25-July-2014

NSE

  • The Sensex, which had gained 1,265 points in eight days in which it hit record highs in two straight days, climbed to hit yet another life-time high of 26,300.17 in early trade. However, the gains proved to be short-lived as FIIs and domestic funds took some profit off the table in recent out-performers. The BSE index finally closed at 26,126.75, down 145.10 points or -0.55 per cent.

  • Recording the first drop in nine sessions, the benchmark Sensex today ended lower after selling pressure emerged in bluechips as investors judged recent gains as excessive. Yesterday, the 30-share bluechip benchmark had ended at its all-time closing high of 26,271.85 and had also hit intra-day high of 26,292.66.

  • The 50-scrip NSE Nifty today, after hitting an intra-day record high of 7,840.95 in the opening trade, slipped below the 7,800-mark as selling pressure was witnessed. It finally ended the session 40.15 points, or -0.51 per cent lower at 7,790.45. Yesterday, the gauge concluded at record 7,830.60. The Nifty had gained 376.45 points, or +5.05 per cent, in previous eight sessions.

  • Meanwhile, IMF has retained its forecast of 5.4 per cent growth in the Indian economy in 2015 and a stronger 6.4 per cent growth next year. India is the only big emerging economy to escape a cut in the International Monetary Fund's update of its World Economic Outlook that says the global economy seems to have tripped on an unexpected contraction in the US economy in the first quarter, which is a welcome sign.

  • Traders said the market was in an "over-bought" position and adopted a cautious approach and preferred to lighten some positions. Selling was more pronounced in realty, metal, power, PSU, auto and oil and gas sector stocks, which pulled down the Sensex and Nifty from record highs.

  • Markets likely to slip 10-15% in near term; trade cautiously, say analysts. In the absence of any major trigger, the 50-share Nifty index, which has already rallied nearly 30 per cent since February, may consolidate in the near term before resuming its uptrend again. According to most analysts, the hope-based rally is largely over and the markets are likely to consolidate in the near term, but the broader trend for the market largely remains on the upside. Although macro-economic data such as IIP, inflation data points the needle in the right direction, but earnings growth for India Inc is still some quarters away, say analysts.

  • Second phase of bull market dependent on Govt execution, says Lalit Nambiar of UTI Mutual Fund. Post the budget, we have come into a phase, which we could call the second phase of the bull market. It is not about valuation catch-up, but about earnings on the ground and where there is earnings traction. In this transition to the second phase you are seeing some pullback and some uncertainty and nervousness. So now it is about what the government is going to do in terms of execution rather than about the promise or the hope. Now people want to focus on what is actually happening on the ground rather than the promise of major turnaround, he says.

NIFTY 3-Month

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