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Market Report

Tuesday, 09-June-2015


  • The S&P BSE Sensex ended the day at 26,481.25 down by 41.84 points or -0.16 per cent. The broader 50-share Nifty closed at 8022.40 down by 21.75 points or -0.27 per cent. The Nifty has extended its decline for the seventh straight session and is on the verge of breaching its psychological support of 8,000. Foreign investors have been relentlessly selling Indian equities. See our 'Market Statistics' page.

  • Besides domestic factors such as weak corporate earnings, prospects of a sub-par monsoon and delay in interest rate cuts, there are a couple of global factors as well that are pushing FPIs to withdraw from Indian equities: (1) US Federal Reserve's rate hike in September; and (2) MSCI will announce its Annual Global Market review today. It is likely to announce inclusion of China 'A' shares in its Emerging Markets Index, a move that would lead to inflow of $400 billion to Chinese market. To maintain proportionality, India could see selling worth US $3.8 billion. Indian stocks that had run up recently after inclusion in MSCI Index may turn volatile with a downward bias, say dealers.

  • Meanwhile, according to Moody's, a weak monsoon is likely to be credit-negative for India as it is expected to push up food inflation as well as government deficits. Further, IMD has revised its monsoon forecast for 2015 from below normal to deficit.

  • Good time to cover short positions, says Ashwani Gujral. Nifty has fallen from 8,470 to about 8,000 levels. There had been five days of relentless selling. The selling halted today. Now sometimes, post five-six days of downside, these sort of days lead to a bit of short covering rally. These rallies on the Nifty tend to be 100-150 point in nature as shorts take profits at some point, particularly closer to strong supports of 7,950-8,000. Tomorrow you will get follow through of that move. I would look for 70-80 point gap on Wednesday and trade would be in that direction, he says.

  • Break above 8,060 on Nifty may trigger 100-point rally on index, says Mitesh Thacker. A pullback can happen, given the fact that Nifty did not decline in today's trade. The index is extremely oversold on the intraday charts. But, I am not looking at an immediate rally beyond 8,200 levels on Nifty or possibly levels above 26,900 on Sensex. The trigger on the upside would be Nifty 8,050-8,060 levels. In case the range is crossed, then we can see another 100-point pullback. That could be a good time to reduce the short exposure and wait for the pullback to play out, he adds.

NIFTY 3-Month

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