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Market Report

Monday, 14-Sept-2015

NSE

  • The domestic equity market kicked off the week on a positive note, rising 246.49 points, or +0.96 per cent higher at 25,856.70 on mixed global cues and a further shrinkage in WPI inflation at home, which fell to minus 4.95 per cent in August from minus 4.05 per cent in July. The broader 50-share Nifty index ended the day with gains of 82.95 points, or +1.06 per cent, to close at 7,872.25 today.

  • Markets snapped two straight session of losses as the buying activity picked up on the back of favourable macroecomic numbers with the industrial production expanding at a better-than-estimated 4.2 % in July and the wholesale price index-based inflation plunging to a historic low of (-)4.95% in August creating room for RBI to slash key rates in the next monetary policy.

  • The Reserve Bank of India (RBI) is likely to cut repo rate by 25 bps at the policy review meeting scheduled towards the end of the month, irrespective of what the US Federal Reserve does, India Rating (Ind-Ra) said in a report today. If the Fed were to delay the normalisation process, the cushion available could be higher, though RBI may like to retain flexibility for future volatility. Ind-Ra's base case expectation is a 25-bps repo rate cut by RBI on September 29.

  • The fall in inflation was in line with expectations and led by the fall in prices of manufactured products and fuel, said Richa Gupta of Deloitte India. However, the worrying part was that erratic rains in August seem to have resulted in prices of some vegetables and fruits picking up. Given, the deficit in rainfall, risks to food inflation have not abated completely and the government would need to keep a tight vigil on food price movements. With the continuing decline in WPI, the focus now would be the CPI data and the upcoming Federal reserve policy meeting later in the week. A combination of lower CPI print and status quo by the Federal reserve will enhance the pressure on the RBI to cut rates further, she added.

  • Not looking at prolonged up; main drift on the upside in short term, says Mitesh Thacker. We have had some kind of intraday breakout. Chance is 7950 would be tested, may be 8020. We are not looking at a big or prolonged up move or even a stronger pullback over here but in the short term yes the main drift is on the upside so may be another 100-150 points on the Nifty could happen, he adds.

  • After market hours today: The annual consumer price inflation (CPI) eased to 3.66 per cent in August, government data showed today. The reading was almost in line with 3.6 per cent forecast by analysts earlier. July's print was 3.69 per cent. Investors are patiently awaiting for the US FOMC meet due later during the week.

NIFTY 3-Month

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