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Market Report

Monday, 20-June-2016

NSE

  • The S&P BSE Sensex opened with a loss of 200 points while the Nifty50 fell below its crucial support level at 8,150 at the opening bell. But the market quickly pared the losses within 15 minutes and the Sensex surged through the day to end at 26,866.92 today, up 241.01 points or +0.91 per cent. The Nifty50 advanced 136.80 points during the day before settling at 8,238.50 today, with a gain of 68.30 points or +0.84 per cent, reclaiming its crucial resistance level at 8,200.

  • The broader market, however, felt most of the selling pressure today with the BSE Midcap and Smallcap indices falling -0.40 per cent and -0.37 per cent, respectively. For the Nifty to sustain the buying momentum, it has to surpass the 8,240-8,250 range comfortably, which is also its 61.80% retracement of the entire down leg from 9,119 to 6,825 level, experts said.

  • What helped the market mood was a sense of relief across global markets after a latest survey showed that the 'remain' camp in Britain had made a comeback to enjoy a slight advantage. Equity futures from New York to Tokyo rallied as anxiety over a the Brexit vote eased. A fresh rally in one-month forward contracts of crude oil also lifted the mood.

  • Back home, the monsoon rains gained momentum in southwest India, while the exit of Raghuram Rajan from RBI also raised hope of an early rate cut, which helped matters. Later in the day, the government announced sweeping reforms in foreign direct investment rules, opening up its defence and civil aviation sectors to complete outside ownership and clearing the way for Apple to open stores in the country.

  • Very clearly it is a mix of brisk short covering, which possibly happened in the morning session. Now that the market has sustained the momentum, it seems like fresh buying is coming in. This should probably send Nifty futures hurtling towards the 8,300 level, said Dr CK Narayan.

NIFTY 3-Month

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