Market Summary for the day :16/09/2014

Sensex, Nifty fall most in 1-1/2 months ahead of Fed outcome:

Sensex and Nifty fell over 1 percent, posting its biggest single-day decline in 1-1/2 months as blue-chips slipped on caution ahead of the U.S. Federal Reserve's two-day meeting, while foreign portfolio sales also weighed on sentiment.

Domestic equity markets extended previous session’s losses and ended down with sharp cut of over 1.20% on Tuesday, which dragged both Sensex and Nifty below the psychologically crucial 27,000 and 8,000 levels respectively. Absence of any positive triggers at home front combined with global anxiety as investors braced for a possible hawkish shift in the U.S. Federal Reserve's policy stance in its two-day policy meeting, which begins later in the day, mainly took a toll on buying activity. Though, markets started on subdued note, the selling pressure which accentuated during the second half of trading session, i.e. post the start of European markets, mainly pushed markets near day’s low point. Meanwhile, broader indices diving deeper into the gut, nursed heavier losses of around three percent by close of trade.

The sentiments were on pessimistic note after RBI’s governor, underscored that there were no chances of RBI slashing rates at the month-end monetary policy announcement, citing that Inflation in Indian economy, was still high and hence there was no point in slashing interest rates since this would further build on to inflationary pressures. 

Traders were seen piling positions in FMCG and IT while selling was witnessed in Realty, PSU and Consumer Durables sector stocks. In scrip specific development, Colgate-Palmolive was trading firm after a foreign brokerage firm upgraded the stock to outperform from underperform. Marico was trading in green touching fresh 52-week high 

after the foreign brokerage firm added the company in its top pick in the mid-cap consumer space.

On the global front, the Asian markets were trading mostly in red while the European market was too trading on pessimistic note. The market breadth on BSE was negative in the ratio of 793:2115 while 87 scrips remained unchanged.

Sensex is currently trading at 26595.85, down by 220.71 points after trading in a range of 26550.29 and 26861.29. 

There were 8 stocks advancing against 22 stocks declining on the index. The broader indices were trading in red; the BSE Mid cap index was down by 2.69%, while Small cap index down by 3.21%.The gaining sectoral indices on the BSE were FMCG up by 0.12%, IT up by 0.07% while, Realty down by 2.62%, PSU down by 2.54%, Consumer Durables down by 2.41%, Power down by 2.40%, Oil & Gas down by 2.18% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.45%, Sun Pharma Industries up by 0.62%, Bharti Airtel up by 0.57%, Infosys up by 0.55% and Hero MotoCorp up by 0.45%. On the flip side, Tata Steel down by 3.25%, ONGC down by 2.63%, Axis Bank down by 2.57%, Tata Motors down by 2.54% and Tata Power down by 2.53% were the top losers.

The European markets were trading in red; Germany’s DAX was down by 42.86 points or 0.44% to 9,616.77, France’s CAC was down 26.83 points or 0.61% to 4,401.80 while, UK’s FTSE 100 was down by 19.32 points or 0.28% to 6,784.89.

TECHNICAL PARAMETERS OF NIFTY

Technically on Nifty, RSI was at 48, MACD Positive below Signal line; India VIX was at 13~, Nifty closed below its both short term moving averages like 5 DMA (8052), 20 DMA (8014) but above its medium and long term ie. 50 DMA (7815) & 200 DMA (6938) which all indicates that market is consolidating on account of profit booking in some of the leading blue chip stocks but is still intact.