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Market Report

Monday, 25-May-2015

NSE

  • The 30-stock Sensex ended the day in red at 27,643.88, down 313.62 points or -1.12 per cent. The broader 50-share Nifty closed the session at 8,370.25, down 88.70 points, or -1.05 per cent. In intraday, the Nifty touched a high of 8441.95 and a low of 8364.15 in a mainly one-way 70-odd points down direction.

  • Benchmark indices succumbed to profit-booking today after closing at five-week highs on Friday, due to selling pressure in metals, fast moving consumer goods (FMCG) and capital goods stocks. The impending derivatives expiry for May series contracts on Thursday remained a drag on the markets. Caution also prevailed ahead of the gross domestic product growth data due on Friday. Domestic shares have been on a solid path so far this month, recovering from a volatile April, on continued hopes of an economic recovery.

  • At the global level, comments by the US Federal Reserve's chair, Janet Yellen that the US central bank could hike rates later this year in case key economic indicators met expectations and developments relating to a possible default by Greece regarding the upcoming €1.6 billion (£1.14 billion) repayment due on its bailout loans also weighed on the sentiment.

  • According to experts, the range-bound activity is likely to continue for some more time, or atleast till expiry due on Thursday. Till then, traders should remain cautious and build short positions. Even though benchmark indices have managed to bounce back smartly in May, most experts have been reiterating their cautious view on the market in the absence of any major triggers. For the prevailing recovery to extend, Nifty should hold above the 8500 mark decisively, otherwise profit taking will set in. On the downside, 8300-8350 zone holds the immediate cushion, say experts.

  • A break below 8,250 could trigger retest of 8,000 on Nifty, says Ashwani Gujral. The level of 8,450 on Nifty is a line from where the market had turned strongly. One may note that we are resuming the downtrend that started from 9,000 on Nifty. We expect Nifty to find support at around 8,250-8,280 levels. From those levels the index would restart its uptrend. It would be important to see whether there is a follow through below 8,280 type of zones. I do not think that anything much has really changed on most parameters. If 8,280 is broken, then a retest of 8,000 should be on cards, he says.

NIFTY 3-Month

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