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Market Report

Tuesday, 08-Sept-2015

NSE

  • The Sensex closed 424.06 points higher, or +1.70 per cent, at 25,317.87 today, led by gains in ICICI Bank, L&T, HDFC Bank, HDFC, and Axis Bank. The 50-share Nifty index managed to close a shade below its crucial psychological level of 7700, supported by gains in auto, banks, capital goods, metal, power and realty stocks. It ended the day with gains of 129.45 points, or +1.71 per cent, at 7688.25 today.

  • The indexes bounced back today, after hitting a 14-month low in the previous session, as the government assured investors that it is looking to take measures to support the economy and keep the reform process going. Prime Minister Narendra Modi's high-level consultative meet with top bankers, industrialists, economists, and key policymakers acted as a catalyst and a sentiment booster, say analysts.

  • Global turmoil will have impact on equity and currencies, but we firmly believe that impact on India will be relatively less, Finance Minister Arun Jaitley said at a press conference. He added that India's fundamentals are reasonably strong, and the country must use the opportunity to strengthen economy. The government has made suggestions for de-stressing steel and textile sectors.

  • Based on technical charts, the current bounce-back looks more like a short-coverings rally which could take Nifty to 7,800. But, it is still difficult to conclude that the trend has reversed because the volatility will come back if the US Federal Reserve decides to hike rates next week. We have seen such days in the last couple of weeks. When market moves up about 100-120 odd Nifty points and then next day, the fall starts, and market starts making a newer low. It is very difficult to say whether it is a dead-cat bounce or we may have turned, but I would possibly feel that the bottom cannot be very far from lower lows we made in the last couple of days, says Piyush Garg of ICICI Securities.

  • Out of last seven days, only two days have been up, but obviously this is a short covering rally, because the stronger groups are not doing as well as the weaker groups, says Ashwani Gujral. This can continue, it could be a multi-day pullback, could get up to 7800-7850, but it is very difficult to say whether this is the real thing. We are overstretched and hence pulling back, he added.

NIFTY 3-Month

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