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Market Report

Tuesday, 29-Sept-2015

NSE

  • The S&P BSE Sensex ended the day today 161.82 points, or +0.63 per cent, higher at 25,778.66 while the 50-stock Nifty50 gained 47.60 points, or +0.61 per cent, to close at 7,843.30 today. The Nifty had hit a low of 7,691.20 and a high of 7,926.55 in intraday trade today. The Nifty managed to rally past its crucial resistance level of 7,900 in intraday at a time when most of the Asian markets closed in the red following a selloff on Wall Street.

  • Equity benchmarks rallied sharply higher from day's low today after the Reserve Bank of India beat expectations to cut benchmark policy rate by 50 basis points, providing a potent counter to the weakness seen in global equity markets. The rally in the benchmark indices was led by rate sensitives, especially banking and real estate stocks, which gained as much as 3 per cent.

  • Analysts and experts were pleasantly surprised by the higher-than-expected RBI rate cut move. Some of them saw it as a major boost to investment and economic recovery while others saw the move as a representative of the underlying weakness in the economic indicators. Hopefully, it would translate into revival of investment, said experts.

  • Expect Nifty to find good support at 7,700; stay stock-specific, says Mitesh Thacker. We have managed to absorb strong bout of negative news twice close to the level. But at around 8,000-8,050 we are getting good surprise. So for me, it remains a stock-specific market. Eventually I do expect Nifty to move in lower but, for the time being, till 7,700 on the index holds, be stock-specific and once that breaks, then we will be more aggressive on the short side, he says.

  • Initiate long positions on Nifty once it breaches 8,050, says Ashwani Gujral. We are now in a contracting phase. In this sort of phase, good and bad news may not impact to the extent that we would like them to. The news is not very important because if a market is contracting, you can get whatever news you want. It will continue in that mode. We have to keep in mind that a 50-bp rate cut will work out only in a good global environment. So, Nifty long positions should be taken only above 8,050, he says.

NIFTY 3-Month

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