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Market Report

Tuesday, 07-Oct-2014

NSE

  • The 50-share index closed at 7,852.40 today, down 93.15 points or -1.17 per cent following a sharp correction in European markets. The S&P BSE Sensex ended at 26,271.97 today, down 296.02 points or -1.11 per cent. The markets are witnessing profit booking after the recent run up, to end near their two-month closing lows with metal shares leading the decline amid growth concerns in China, the world's largest consumer of metals.

  • The Nifty has breached 50-day DMA and further downside in the near term can't be ruled out, say analysts. Meanwhile, Foreign institutional investors, which were largely responsible for an over 25 per cent rally seen in the BSE Sensex, have become net sellers of Indian equities in 12 of the last 14 trading sessions. Analysts attribute the current weakness more because of technical factors and absence of follow up buying. Since retail frenzy has not yet kicked in, dominant players remain the professional investors who may be cagey to buy at such high PE multiples, they say.

  • Domestic issues such as coal block de-allocation which is hurting banks having exposure to the affected companies, and fading hopes of a rate hike in 2015 kept the markets under pressure. Global factors are also weak with revival in China required to boost global growth. Early rate hike fears in the US are also adding to the fear in the market. The Euro zone inflation remains at lower levels and growth under stress, say experts.

  • Markets are in a consolidation phase, should rise again after a pause, says Gautam Trivedi of Religare Capital Markets. The FII slowdown is currently more a function of the market having run up ahead of itself. You have got the earnings season now starting with Infosys this Friday, which will have an impact on the markets. We have got an improving inflation situation, and overall macro data is significantly better now than it was the same time last year. So, this is a consolidation phase and after a pause, the market will actually start trending higher again, he says.

  • Expect 100-150 point correction in Nifty, says Mitesh Thacker. I have maintained levels of around 7840-7820 as the first support levels to watch out for. We are now very close to those levels. Maybe around 7840-7820 we expect some kind of some kind of support but in case those levels are being broken, then we might be in for 100-150 point correction in Nifty, he says.

NIFTY 3-Month

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