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Market Report

Tuesday, 02-June-2015

NSE

  • The 30-stock benchmark Sensex ended the day at 27,188.38; down 660.61 points, or -2.37 per cent. The broader 50-share Nifty index also came under pressure and broke below its crucial psychological support level of 8250 to close the session at 8,236.45; down 196.95 points, or -2.34 per cent. It had touched a high of 8445.35 immediately after opening and had gone down steadily in intraday to touch a low of 8226.05 today to close marginally higher.

  • The Sensex slumped 661 points and the Nifty dropped nearly 200 points today, even as the rate cut by the RBI was in line with street expectations, as downgrade of monsoon forecast raised fears of higher inflation adding to the uncertainty of further easing of key policy rates in the near future. The RBI has cautioned on inflation increasing due to the sub-normal monsoon, which can push the inflation rate to 6 per cent by January 2016, which is also the target set earlier for monetary policy. This indicated that the RBI will take further action based on inflationary developments. Meanwhile, the slow pace of recovery in the economy also weighed on market sentiment.

  • Nifty sees a fresh leg of downtrend, heads towards sub-8000 levels, says Mitesh Thacker. The force, with which the market has fallen has triggered breakdowns on many stocks as well as on sectoral and key indices. I believe that is clearly a fresh leg of downtrend. We are possibly looking at a market, which could be very choppy. The first target for Nifty that I would look on the downside would be closer to about 8,120 to about 8,070. The index would possibly head towards sub-8,000 levels. On the upside, unless 8,340-8,350 on Nifty are being crossed, I would maintain a negative bias, he says.

  • Nifty gives strong signals; 8,000-8050 levels in sight, says Ashwani Gujral. The market started falling before the rate news. That means that it has got nothing to do with Rajan. The market just had topped out. In such a case, even if he would have come with a 50-bps rate cut, we would still have been at lows. What people should initially play for is 8,000-8,050 on the Nifty. I do not think you will find major support till that level comes in. The market has collapsed on a daily, weekly, monthly basis. That is a fairly strong signal, he says.

NIFTY 3-Month

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