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Market Report

Wednesday, 20-May-2015


  • The benchmark Sensex, which opened in the green today, surged over 250 points in intraday trade to close at 27,837.21, up 191.68 points or +0.69 per cent. The breader Nifty could hold 8,400 level today and closed at 8,423.25, up 57.60 points or +0.69 per cent. After days of extreme volatility, markets finally appear to be consolidating.

  • Today's gains were mostly led by technology and banking shares, but the key indices pared some gains as the trading session progressed. Investors bought shares on hopes that the RBI will lower lending rates amid forecast that the monsoon will keep its date with India. Markets now await the monetary policy review of the RBI, which meets on June 2, for a definitive directional cue. The central bank is widely anticipated to ease rates on the back of weaker industrial output growth and benign inflation scenario.

  • In a related development, DII holding in NSE-listed companies went up to 5.01 per cent at the end of March 31, 2015, from the year-ago level of 4.58 per cent, on an aggregate basis, say reports. During the first three months of 2015, when inflows from FPIs surged, the domestic institutions invested less. However, since April, when FPIs began moving to other emerging markets, DIIs got an opportunity to buy stocks at relatively lower valuations. Thus, DIIs have stepped in to stem the Nifty fall despite anxious exit by FPIs/FIIs.

  • As long as Nifty stay above 8,300, the trend remains on the higher side, says Ashwani Gujral. What may provide momentum to the markets are good monsoon and a further cooling of crude prices. Overall, the whole texture of the market looks positive because banks, IT and Nifty heavyweight Reliance Industries are heading up. In such a scenario, it is very difficult to see how the market can break. But this is not that kind of momentum market which can push Nifty towards 9,000 in 15 days. The market will do backing and filling and then possibly will latch on to good news, he says.

  • Sectoral churning is underway; Nifty to find support at 8,300 level, says Mitesh Thacker. There is some correction in midcaps, but broadly the drift still remains on the upside. IT is where trading ideas would come from. This kind of churn might continue as the market finds a new range. To me, it appears that Nifty is headed towards finding the higher end of the range, which could be closer to 8,500 or may be around 8,600. On the downside, anything around 8,300 on Nifty would be the first support area. In case Nifty breaks that, we might possibly decline another 100 points. But, it seems that market will possibly figure out its feet, he adds.

NIFTY 3-Month

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