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Market Report

Friday, 24-June-2016

NSE

  • The S&P BSE Sensex lost -2.24% or 604.51 points to end at 26,397.71 today, while the Nifty50 index plunged -2.20% or 181.85 points to close at 8,088.60 today. In the broader market, the BSE Mid-cap Index declined -1.1%, while the Small-cap Index fell -1.5%. The Nifty hit a low of 7,927.05 in intraday today which is a loss of 343.40 points from yesterday's closing.

  • Benchmark indices ended over -2% lower after witnessing a sharp recovery from day's low, tracking a meltdown in global stocks after Britain in a historic referendum voted to exit the European Union. Concerns further mounted as commentators said Britain's exit, commonly referred to as Brexit, would mean that the EU could slip into recession. Britain has been a member of the trading bloc since 1973. Voting in the referendum was concluded in a single day yesterday.

  • UK's vote to exit European Union knocked off nearly Rs 4 lakh crore from the investors' wealth in Indian stock markets within minutes. The benchmark indices broke below crucial support levels. However, the domestic market weathered the storm well, with the Nifty50 managing to recoup losses after hitting a low of 7,927. But the risk remains for the coming weeks. The US market will react to 'Brexit' later on Friday and the repercussion of that will be felt when the market opens for trading on Monday morning.

  • There is panic in global markets, said Dinesh Thakkar of Tradebulls. We expect the hit on the rupee to be temporary, but it might bounce back as and when clarity emerges on the real impact of the UK verdict. The immediate consequence of Brexit would be that investment would slow down further in both Britain and India. The Indian economy is relatively insulated from the uncertainty. Yet we expect a 5-7 per cent fall in Indian market over the next few weeks, he said.

  • Brexit was an event that no markets be it equities, fixed income, currencies or commodities were positioned for, said Mihir Vora of Max Life Insurance. It is probably a once-in-a-decade event for markets and it can have several derivative events. The dust will take a while to settle. We expect central banks to step in with liquidity support and other stimulation measures. While there are no immediate negatives for India, a general risk aversion will mean reduced foreign flows in the short term, he said.

NIFTY 3-Month

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