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Market Report

Friday, 14-Aug-2015

NSE

  • Braving against all odds, domestic markets today broke free from the bear grip after a long lull. The S&P BSE Sensex rose 517.78 points, or +1.88 per cent, to settle the session at 28,067.31 today. The broader 50-share Nifty barometer added 162.70 points, or +1.95 per cent, to close the day at 8,518.55 today.

  • The benchmark indices had a spectacular session of trade, with the Sensex reclaiming the 28,000 mark and Nifty settling above 8,500, on expectations of a rate cut by the Reserve Bank of India, a glimmer of hope on the GST front and return of stability in the Chinese currency markets. China's central bank raised the value of yuan against the US dollar by 0.05%, halting a 3-day decline in the currency.

  • The market sentiment was boosted on hopes that GST could well see light of the day as the government sticks to its timeline of April 2016. Market also cheered the MSCI rejig, which could bring foreign currency inflows to the tune of $254 million to the Indian market. Besides, falling global crude oil prices, which slid to its lowest level in over six years, lifted sentiment, they said.

  • The Rupee bounced back from the 65.34 mark, its weakest level since September 2013, after China strengthened yuan against the dollar. The Rupee was trading at 65.0100 when reports last came in. A solid performace at the equity markets also helped in the recovery of the Rupee.

  • Released today, the wholesale prices fell at a faster-than-expected annual rate of -4.05% in July, its ninth consecutive decline and lowest in atleast a decade, mainly driven by weak food and fuel prices. The plunging inflation has resurrected hopes of a rate-cut by the central bank. Experts expect CPI inflation to undershoot RBI's January CPI target considerably, implying scope for further 25-50 bps rate cut in FY2016. They believe chances of a 25 bps rate cut on September 29 have increased significantly, with global volatility being the only potential risk.

  • 250 point rally on cards if Nifty scales past 8650, says Mitesh Thacker. The last few weeks of price movement for the Nifty has seen 8300-8320 on the downside to about 8600-8650 on the upside. Today, we have kind of turned up from the lower end of the range at least and closed with a very strong price action. That suggests that we should retest the earlier highs of 8620 to about 8650 and if you breakout, this is being a 250 to about 300 point kind of range. Therefore, if we start getting past 8650 then a 250 point kind of rally is the minimum which the market should do and that will give you targets of 8900, he says.

  • Expect Nifty to move closer to 9,000 level once the good news comes in, says Ashwani Gujral. Till yesterday parliament did not do anything, yuan depreciated, and there was gloom and doom. Greece and China have happened and the market has still held on to 8400; that is extremely positive. Market today turns around and gives you a 500-600 point on the Sensex, that just means that this is a very strong market and all sorts of bad news is getting bought into. When the good news starts coming, I would not be surprised if the market can take 8650 out and moves closer to 9000, he says.

NIFTY 3-Month

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