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Market Report

Thursday, 07-Jan-2016

NSE

  • The S&P BSE Sensex cracked 554.50 points, or -2.18 per cent, to close the day at 24,851.83 after a sharp drop in the CSI 300 index in China led to a halt in trading in the Chinese market. The Sensex managed to touch its fresh 52-week low of 24,829 in intraday trade and closed at their 4-month closing low.

  • Broader market barometer Nifty50, too, succumbed to the selling pressure and ended the day at 7,568.30 today, down 172.70 points, or -2.23 per cent. Benchmark share indices lost ground for the fourth straight session to end at their lowest closing level in four month. Investors have expressed fears that the yuan's rapid depreciation could mean China's economy is even weaker than had been imagined.

  • The domestic equity market continued its bad run today amid a crack in Chinese equity markets, devaluation of the yuan and a fresh slump in crude oil and commodity prices. Stocks exposed to the Chinese market and the energy basket saw sharp declines. Jindal Steel, Tata Steel, Tata Motors and Vedanta, among others, tanked as much as -10 per cent.

  • After the shake off given by China in terms of 3rd Currency Devaluation in a span of 5 odd months, there was sheer disappointment across the global markets, said Kunal Bothra of LKP Securities. Almost all of Nifty 50 stocks closed in the negative today, a very rare reading. It indicates that this market may need a lot of time to recover. So far the indices are down almost 5% YTD, and the year has just begun. Nifty is very close to breaking its previous swing lows which I believe could be a formality given the fear index spiking up. The next supports for Nifty would then arise near the 7,380 mark and approx 24150 in Sensex, he added.

  • The choice is very clear, said Mitesh Thacker. You would go long only when you see signs of reversal. Now, the problem is that we are close to the support levels but the overall direction is still on the weaker side. So, let us maintain the short bias. I do not see any kind of reversal happening soon. With the European and US markets showing a negative bias, there is a good chance that we might open below 7,550 tomorrow in a gap-down opening, and then possibly head towards 7,400 of thereabout, he said.

NIFTY 3-Month

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