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Market Report

Wednesday, 11-May-2016

NSE

  • The 30-share Sensex closed the day at 25,597.02, down 175.51 points or -0.68 per cent, while the broader Nifty50 ended at 7,848.85 today, down 38.95 points or -0.49 per cent. However, the broader market bucked the trend as the BSE Midcap index ended with gains of +0.17 per cent. Weak trading in European markets in afternoon trade added to the weak market sentiment.

  • Benchmark indices snapped two day winning streak and ended lower amid a volatile session after participants turned jittery over foreign fund inflows after the country decided to impose capital gains tax arising in Mauritius from sale of shares in Indian companies starting from April 1, 2017. This change in an inter-government treaty that will allow India to tax Mauritius investments for the first time since 1983 triggered fear among overseas portfolio investors, which in turn dragged the benchmark equity indices down on Dalal Street on Wednesday.

  • After a gap-down opening, the Nifty50 witnessed wild swings in today's trade but managed to close just below its crucial psychological support at 7,850 level. The wild swings resulted in a 'high wave' kind of pattern on the daily candlestick charts. A 'high wave' pattern is formed when the candle has a very small real body and large movement on either side, which signifies uncertainty, doubt and confusion in the market. However, a huge gap-down opening and subsequent recovery from the day's low of 7,780 level minimised the lower shadow.

  • Analysts felt investors stayed away from long positions through the day. Investors were on the back foot because of the way the market began the day, said Dr CK Narayan. I was betrayed by the fact that there was hardly any leveraged long positions in the market. Through the day, when the market rallied, many of them got sold out, but we did not see any pullback, added Dr Narayan.

NIFTY 3-Month

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