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Market Report

Tuesday, 16-Feb-2016

NSE

  • The S&P BSE Sensex closed 362.15 points, or -1.54 per cent, lower at 23,191.97 today, giving up more than half of the 568-point gain it had logged on Monday. It hit a low of 23,164.54 and a high of 23,692.08 during the day. The Nifty50 ended 114.70 points, or -1.60 per cent, lower at 7,048.25 today. It had risen to 7,162.95 on Monday.

  • Markets ended lower amid profit taking in late trades with PSU bank shares leading the decline after sharp gains in the previous session while declining merchandise exports in January also weighed on market sentiment. The sharp selloff pushed the Nifty50 below its crucial support level of 7,100. The index has an important support at 6,936-7,020 level and if it slips below that, further correction cannot be ruled out.

  • Just when the stock market seemed to be getting on to firmer ground, the domestic equity indices tanked in a late-session selloff today, after Opec ministers agreed to freeze oil output at the January 11, 2016 level, raising fears of a spike in crude prices. A sudden rise in crude oil prices can hurt an oil-importing economy like India, which imports almost 80 per cent of its total crude requirement. It will put additional pressure on our trade deficit. Oil imports contracted 39 per cent this financial year due to a fall in crude prices. Any volatility in oil prices will be negative for India.

  • Technically, we are in a bear market right now, because we have corrected by more than 20 per cent from the peak levels, which we made about a year ago last March, said Tushar Mahajan of Nomura India. Right now, the market is driven a lot by what is happening globally and not so much by the local factors. The moves on the upside could be fairly ferocious like what we saw on Monday driven by short covering, but given the nature of flows, it is tough to believe that we have had a turnaround, and we could kind of rally back to 7,700 or so, he said.

  • In short term, market will be negative, says Mitesh Thacker. Unless and until we start capturing 7100 again, the market movement will be more on the negative side. If we fail to do that and the global markets remain weak I think a test of 6920 at least is what should happen again, possibly a breakdown as well. Only above 7100, do I expect some kind of stability and an upward push, but till then I think we will be choppy and a downward biased market, he added.

NIFTY 3-Month

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