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Market Report

Tuesday, 05-Aug-2014

NSE

  • Sensex, the 30-share index, closed at 25,908.01 today, up 184.85 points or +0.72 per cent. It touched intraday high of 25,928.32 and a low of 25,562.36 in trade today. The Nifty closed at 7,746.55 up 62.90 points or +0.82 per cent higher. It touched an intraday high of 7,752.45 and a low of 7,638.05 in trade today.

  • Shares gained for a second consecutive session after the central bank lowered minimum bond holding requirements for lenders to spur investment, sending blue-chips higher. Reacting to the news, the market remained volatile with wild swings on either side. The index recouped losses towards the fag end of the trade, supported by gains in auto, consumer durable, IT and pharma stocks.

  • The RBI kept policy rates unchanged at its policy meet today. Repo rate was left unchanged at 8 per cent and reverse repo rate at 7 per cent. However, the RBI has cut SLR by 50 bps to 22 per cent. The central bank will continue to monitor inflation developments closely. It remains committed to reaching 8 per cent CPI by Jan 2015, 6 per cent by Jan 2016.

  • RBI Governor Raghuram Rajan assured investors in a press conference today that there is still room to cut rates in the near future provided disinflations continues which pushed the Sensex by over 200 points higher. Raghuram Rajan further added that RBI will not hold rates high longer than necessary, which has remain an overhang on markets for quite some time now. A slight cut in interest rates is important as it will help revive investment cycle and push GDP growth, say analysts.

  • RBI policy is a non-event, Equities to maintain upward bias, say experts. According to analysts, the RBI policy was inline with expectations but the SLR cut will result in more funds available for the private sector. There is nothing which is coming as a sort of a negative surprise and the direction of the markets incrementally looks positive only, they say.

  • Direction of markets looks incrementally positive, says Manish Sonthalia of Motilal Oswal AMC. I do not think anybody really expected a repo rate cut. But an SLR cut was more or less expected. So, it is on expected lines. The thing which the markets are looking out for is the results season. It has been more or less pretty decent. Monsoon deficit has come down to 21% now. That again is an incremental positive from the markets' point of view. The Budget has been good. Hopefully, the Insurance Bill will be passed too. Some of these measures are quite positive. So the markets are trudging along well, he adds.

NIFTY 3-Month

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