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Market Report

Monday, 27-June-2016

NSE

  • While the Sensex lost about 604 points on Friday, it opened 70 points lower on Monday morning. From there on, the 30-stock benchmark kept swinging between gains and losses following global cues, and eventually closed at 26,402.96 today, up +0.02 per cent or 5.25 points. The broader Nifty50 index settled at 8,094.70 today, up +0.08 per cent or 6.10 points.

  • Weakness in IT exporters post Brexit capped further upsides today as IT's Big Five took a beating. IT exporters were among the top Sensex losers on concerns over demand uncertainty from Europe and volatility in the British pound post the Brexit. TCS which has a substantial exposure to UK was the top loser down over -3% today. All in all, the domestic equity market managed to shrug off Brexit worries positively but managed to notch up only marginal gains.

  • The Nifty50 started with a gap down but ended a choppy session with a positive bias today, forming a 'Bullish Belt Hold' pattern on the daily candlestick charts. This pattern, formed after a big gap down day in the previous session, could be pointing towards a trend reversal. However, this pattern should not be studied in isolation, because it appears on the charts frequently. The critical support for Nifty50 is available at the 8,003 level in the form of a 50-day EMA. Sustaining above this level is crucial for Nifty50 to avoid a medium-term downtrend. However, the uptrend is likely to continue only if it closes above 8,200, say experts.

  • Experts were not very hopeful of strong trade on Tuesday. I am not too sanguine about trade tomorrow unless we have some very specific news flow. Moreover, rollovers are going on and rollovers are actually in muddy waters. They are creating an artificial sense of either strength or weakness in some set of localised set of stocks. So that makes problems a little more complicated when you are trading directionally. The smoother passage of the market seems to be over, said Dr CK Narayan.

NIFTY 3-Month

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