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Market Report

Wednesday, 10-Sept-2014

NSE

  • The 30-share BSE index remained in negative territory during the session on widespread selling. It slumped to a low of 27,018.11, before ending at 27,057.41 -- a net loss of 207.91 points, or -0.76 per cent. This is its second straight session of declines after it slipped by 54.53 points on Tuesday. On similar lines, the National Stock Exchange index Nifty fell below the crucial 8,100 mark and closed 58.85 points, or -0.72 per cent, down at 8,094.10 today. It had lost 20.95 points in the previous session.

  • In its worst single-day fall in over a month, markets retreated for the second straight day from record highs on concerns that foreign funds may start trimming their exposure to emerging markets if the US Federal Reserve hikes interest rates sooner-than-expected. Today's nearly 208-point drop is the biggest fall for the Sensex since it lost 259.87 points on August 8, 2014.

  • Further, the weak rupee also weighed on market sentiment. The Rupee dipped below the 61-mark against the US dollar intra-day on concerns the US may raise interest rates sooner than investors had expected. Select buying in realty and power sector stocks cushioned losses, while weakening global markets affected sentiments, said equity brokers.

  • Our markets fell on sustained profit-booking after the recent rally and weak global cues, but the real action was seen in small and midcap stocks. Tracking the momentum in the broader market as much as 412 stocks have hit their fresh 52-week high in trade today on the Bombay Stock Exchange, which include names like ACC, Aditya Birla Nuvo, Essar Oil, Cipla, Bharti Airtel etc.

  • There is little bit of fatigue which is expected at elevated levels, and some kind of profit taking is obvious especially when the gains have been so sharp and have come so fast, said P Phani Sekhar of Angel Broking. Almost all sectors have rallied, so even the theme of sector rotation has been exhausted. On top of it if you look at the global cues they have not really been supportive as there was a correction in developed markets. Even emerging markets have mildly corrected, he added.

  • Most macro indicators seem to be under control currently, says Abhay Aima of HDFC Securities. I do not think, technically and fundamentally, we are in a zone where we need to get worried. We all know that the market moves in a band and it could be at the lowest end or the upper end of the valuation, but certainly not in a dangerous zone, he says.

  • Bulls in total control of market momentum, price action, says Apurva Sheth of JHP Securities. Bulls may take the Nifty to 8,200 levels. However, traders should avoid temptation and keep buying quality stocks with strong fundamentals. On a monthly basis, the index has closed above the Upper Bollinger Band consistently for the last sixth straight months in a row, suggesting that we are in a strongly trending bull market. In the month of May the monthly RSI managed to move above the 70 per cent level for the first time after its debacle in January'08. It has stayed above the same since then, which suggests that on a longer time-frame bulls are in total control in terms of both momentum and price action, he adds.

NIFTY 3-Month

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