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Market Report

Monday, 07-Dec-2015

NSE

  • The S&P BSE Sensex slipped 108.00 points, or -0.42 per cent, to close the day at 25,530.11 today, while the 50-stock barometer Nifty50 ended down 16.50 points, or -0.21 per cent, to close lower at 7,765.40 today. ITC and CIL were the top losers in the BSE benchmark.

  • Markets closed lower for the fourth session closing near three-week low today after initial buoyancy over expectation of clearance to the GST Bill and strong US jobs data dissipated quickly. Investors are eagerly looking forward to the passage of the GST Bill after a panel headed by chief economic adviser Arvind Subramanian recommended a revenue neutral rate of 17-18 per cent.

  • ITC contributing the most to the decline after the GST panel suggested that tobacco products including cigarettes will see a 40% 'sin' tax. The taxation is over 25% value added tax (VAT) already charged on current products. Meanwhile, energy majors ONGC and RIL cracked 1.5% each after OPEC decided to keep the output targets unchanged.

  • Cut short positions and adopt wait and watch policy, says Mitesh Thacker. There are two scenarios which can happen after Monday's decline. The Nifty50 has met with important support levels of 7,750-7,710. That range of 40 points is filled with some 3-4 support levels. My sense is that in case we do not break below that, then we will have a very subdued week where the index may just move in 100-120 points range. In such a case, 7,720-7,730 might hold out on the downside and 7,830-7,850 on the upside might be the upper limit. But in case the index breaks 7,700, then we are in for some more correction. This down move should extend then to about 7,550. So for the time being, the idea is to cut your short positions and wait, he says.

  • Expect Nifty50 to move in a narrow range; avoid going long on index, says Sandeep Wagle. Clearly, the undertone of the market is quite bearish, but there are multiple supports for the Nifty50 in 7,750-7700 range. Those supports may not be that easy to break. It may be a matter of time, a couple of days or weeks, before those supports would be taken out and we may move towards 7,550. But till such time you may have bounce backs towards 7,800-7,850, he says.

NIFTY 3-Month

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