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Market Report

Tuesday, 30-Sept-2014

NSE

  • The BSE Sensex finally closed 33.40 points higher or +0.13 per cent at 26630.51 today. It rose to a high of 26851.33 and a low of 26481.31 in intraday trade today. Tracking the momentum, the 50-share Nifty index closed +0.07 per cent higher or 5.9 points at 7964.80 today. It rose to a high of 8030.90 and a low of 7923.85 in intraday trade today in a highly volatile trade, as RBI in its monetary policy review hinted at the possibility of no rate cuts till January 2016.

  • The RBI policy review statement, reinforced Governor Raghuram Rajan's stance on inflation and highlighted that it may ease interest rates only if CPI inflation comes below 6 per cent before January 2016. So, if inflation is above that figure during the said period then the central bank may be forced to hike rates. Most analysts on Dalal Street were hoping for a rate cut in first half of 2015, but as per the policy statement by the RBI it may not happen before 2016.

  • The benchmark indices, which spiked up after the Reserve Bank of India's policy meet, pared most of the intraday gains. Banks, capital goods and metals are leading the fall. The euphoria in the market was short-lived as reality of pause in interest rates dawned upon the participants. The Nifty has been facing supply pressure and finding it difficult to close past 8,000 mark. According to analysts, the chart formation looks bearish in the near term. If the Nifty fails to close above 8,050 in the next few sessions then traders should be ready for a sharp correction, they say.

  • Expect Sensex to touch 35000 by December 2015, says Sanjay Sinha of Citrus Advisors. I do not see a correction of 10-15%, or a huge crash in the market of about 50%, at least in the near horizon. We will probably see the market take in various bouts of profit booking. Between May 16, when the general election results were announced, and now, the market has actually seen such bouts on three occasions. So we will have to live with that and unless we have some major accident globally, we are on course for 35000 points on the Sensex by December 2015 and roughly about 11000 points on the Nifty during the same time horizon, he says.

NIFTY 3-Month

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