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Market Report

Thursday, 28-May-2015

NSE

  • The 30-stock benchmark Sensex ended the day at 27,506.71 down 57.95 points or -0.21%. The broader 50-share Nifty closed at 8,319.00; down 15.60 points or -0.19%. In intraday, the Nifty touched a high of 8364.50 and a low of 8270.15 that led to a swing of about 100-points in intraday.

  • The markets had a sluggish closing on the last day of May derivatives series due to selling pressure in financials and pharma shares. The weakness in most Asian markets, muted corporate earnings and growing prospects that the Federal Reserve may raise interest rates led to cautiousness on the Street.

  • The sentiment turned pretty bearish in afternoon deals after China stocks took a sudden plunge, sinking over 6% on reports that its central bank sold 7-day, 14-day, and 28-day forward repos to financial institutions in recent days at current market interest rates. The move is expected to wipe out tens of billions of dollars from the financial system. Also, fresh margin tightening by brokers also led to the slump in Chinese markets.

  • Indices giving positive signals, Nifty may climb to 8450, says Ashwani Gujral. On the expiry day, even Chinese markets tried to weigh on the sentiment, but the 8280 level on Nifty did not break. The good news is that both CNX IT and Bank Nifty are showing a decent amount of strength. Also, in the ongoing decline, all the three indices are now holding on to their 20-day moving averages. That is extremely positive. I would qualify this as chances of the Nifty moving higher, he says.

  • Chances of Nifty slipping to 8000 is high if RBI does not cut rates next week, say Experts. A poll conducted by Reuters suggested that the central bank is likely to cut its benchmark interest rate by 25 basis points to 7.25 per cent on June 2, and make a similar move before December. But a section of analysts believes that RBI may not cut rates on June 2. RBI has reduced rates by 50 bps in two tranches in year 2015 and another rate cut in less than 180 days could send a wrong signal for Indian economy. Foreign investors could consider that the Indian economy is in pressure and thus reducing rates. Plus, the first two rate cuts are yet to reflect their effects in economy. If the Reserve Bank of India stands put on rates, then there is a strong possibility that the markets may slip further and Nifty may even slip towards 8000-8100 levels in the near term, say experts.

NIFTY 3-Month

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