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Market Report

Friday, 01-Aug-2014

NSE

  • The S&P BSE Sensex came under intense selling pressure in the last 1 hour of trade today, falling as much as 435 points, which also marked its biggest single-day fall since July 8 when it tanked 518 points after the railway budget. Tracking the momentum, the 50-share Nifty index also slipped below its crucial psychological level of 7600 in trade, marking its biggest fall in 3-1/2 weeks - weighed down by losses in realty, banks, pharma and auto stocks, amid a global sell-off.

  • The BSE Sensex finally ended -1.60 per cent or 414.13 points lower at 25,480.84 today. It hit a low of 25,459.13 and a high of 25,862.68 in intraday trade. The 50-share Nifty index closed -1.54 per cent or 118.70 points lower at 7,602.60 today. It hit a low of 7593.90 and a high of 7716.70 in intraday trade.

  • With dollar gaining strength against most global peers, the rupee breached the 61-mark to trade at over three-month low of 61.17 (intra-day). After US Fed trimmed monthly stimulus, fears have heightened that inflows into emerging markets would slow. All eyes are on a US non-farm payroll report to be released later today for more cues, said brokers. Further, investors also turned cautious ahead of RBI monetary policy meet next week.

  • Weak global markets and continuing geo-political tensions rode over the positive core sector growth data released in India. European indices were trading 1-2 per cent lower. Asian markets closed upto 1 per cent down as global sell-off spread.

  • Factory activity expanded at its fastest pace in 17 months in July on increased orders, showed a widely-tracked HSBC purchasing managers' index (PMI). However, this also jacked up prices, which might cause the RBI to hold the policy rate in its review next week.

  • Indian stock markets have purely driven by foreign fund inflows following the US Fed's bond buying program. This has been largely responsible for the over 20 per cent rally seen in the BSE Sensex. Foreign funds have pumped over $5 billion in Indian equities during July on the back of the new government's reforms agenda. Total inflows since January are over $25 billion. They have now turned net seller for three consecutive days in a row, as per provisional exchange data. Overseas investors sold shares worth Rs 1,072.96 crore today. Before that, the sell figures were Rs 381.66 crore on Wednesday and Rs 1,654 crore on Thursday, which was their biggest single-day selling since July 2.

  • According to technical analysts, markets have slipped below their crucial support levels indicating further weakness in the coming trading sessions. We have broken below the short-term averages, and closed below 7675 on the Nifty suggesting we are heading for a minor breakdown, said Mitesh Thacker. I am not looking at very significant fall or very strong declines happening in the short term, but the drift is clearly on the downside. I would be looking at the Nifty to test the levels of 7530 and then 7460, added Thacker.

  • Today the sense is coming that it is not about domestic cues anymore, says Ashwani Gujral. From here global markets could go in for a 5-8 per cent dip and we go in for a dip along with them and possibly retest the lower end of our current range which is 7450 to about 7850. The sell off that we have seen in the intraday pullback shows that the market lacks conviction and a buying support even at lower levels. So chances are that we move lower before we move higher, he adds.

NIFTY 3-Month

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