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Market Report

Tuesday, 16-Aug-2016

NSE

  • The S&P BSE Sensex swung some 256.45 points between gains and losses in intra-day trade but managed to make some recovery in the last one hour tracking strength in Dow futures. It settled at 28,064.61 today, down 87.79 points or -0.31 per cent. The Nifty50 lost its crucial level of 8,650 and closed at 8,642.55 today, down 29.60 points or -0.34 per cent.

  • Benchmark indices snapped a two-day winning streak, amid a volatile trading session, with Infosys among the top losers after its key client Royal Bank of Scotland cancelled a project. The US markets had seen a rally in overnight trade but that didn't get rubbed off on the domestic market, which saw cautious trading throughout. As soon as the July WPI numbers were revealed, the equity benchmarks nosedived. Further, higher-than-expected increase in July wholesale price inflation and weak global cues also dampened sentiment.

  • July WPI came in much higher at 3.6% against Street expectation of 2.7%. Experts expect this number to come down once the monsoon impact on kharif output is clear. With both WPI and CPI inflation coming in higher, a RBI rate action may not be expected for some time, they feel.

  • The momentum, which had started on Dalal Street last week, fizzled out sooner than most technical experts had anticipated. The Nifty50 today formed a 'Hanging Man' kind of pattern on the daily candlestick charts, as it closed below its crucial level of 8,650. In this formation, the market witnesses a significant selloff towards opening but manages to recoup some of the losses and close near the opening level. The selloff is seen as an early indication of a short-term top formation. It does not necessarily mean the buyers have lost their edge, but gives an early indication that the momentum may be waning.

NIFTY 3-Month

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