Today’s Market Summarised

  • Nifty had a sizeable gap-down opening of around 90 points today, tracing negative global cues. Excluding this initial gap-down, the market was in a mood for consolidation today. Volatility was observed within these ranges mainly because today was weekly F&O expiry. The benchmark index, Nifty 50, traded mostly between 11,290 and 11,350 within a gap of 60 points. Nifty closed the day at 11,312.20, down 96.20 points or 0.84%.

  • Nifty Bank followed Nifty with a similar gap-down opening at 22,000 level. Very similar patterns were followed by the two indices, with even Bank Nifty consolidating heavily throughout the day. The index closed the day at 21,999.45, down 286.45 points or 1.29%. A perfect Doji pattern (meaning a small trading range—with an opening and closing price that are very similar) was formed in the 1 Day candles of both Nifty and Bank Nifty.

  • All major international markets are trading in red currently. This follows the concerns raised by members of the US Federal Reserve about very slow economic recovery going ahead. We will have to wait for the FII/DII data to get a better understanding of how much money was actually pulled from the Indian stock market system today.

  • Nifty Media (+3.11%) and Nifty Metal (1.02%) were the best performing sectors of the day, while indices following banks and financial institutions fell over 1% each.

News Picks

  • Shares of state-run energy company NTPC emerged as the top-gainer in Nifty 50 today. Prices jumped to Rs 101.15, up 6.87%. During the day, an official announcement had come out regarding a pact between the company and L&T Hydrocarbon Engineering (of L&T group) for setting up a CO2-to-Methanol plant. Would you like to receive such live updates from Marketfeed in the future?

  • All 5 top gainers of Nifty 50 were companies involved in energy production and distribution, namely NTPC, ONGC, PowerGrid, COALINDIA and BPCL. Thematic indice, Nifty Energy, rose 1.58% today in a bearish market. Just reminding you that a  nation’s development can be measured by analysing their consumption of energy.

  • Shares of State Bank of India fell along with the general market to Rs 194.95, down 1.07%. Yesterday, the country’s largest public sector lender raised nearly Rs 9,000 crore via a primary bond sale. Do you think that SBI has a potential to make a higher high after the good news of the company strengthening its financials? Or do you think public-sector banks in India are risky to take trade or invest in?

  • Share of L&T Finance Holdings closed at Rs 68.90, up 2.61%. In our morning feed, we had mentioned L&T Finance’s plans to go for a Rs 2000-3000 crores rights issue.

  • Prices of PNB Housing Finance shares jumped to Rs 282.70, up 2.73% today. The company has approved raising up to Rs 1,800 crore through preferential or rights issue. Do not forget that the above two movements occurred in a bearish market where banks and financial institutions were the top losers of the day.

  • Zee Entertainment Enterprises (ZEEL) shares continued their unbelievable rally even in a bearish market by closing at Rs 199.05, up 1.41%. We had talked about The Bombay High Court dismissing a plea by Yes Bank that sought to prevent promoters of the company from further selling their shares here.

Markets Ahead

The markets ahead seem to be a bit tougher than it was till now. The rejection of price levels of Nifty at 11,500 had certainly caught my attention. Hope you got an idea too when I shared that observation with you here yesterday. But every market participant would have been confused with the global fall due to the negative outlook from the US Federal Reserve. Is it a wake up call for the stock market, that this rally is just based on the blind belief that things will get better soon? Or is it nothing more than noise considering that the stock market generally tolerates falls in growth figures, as long as it is expected? A global slowdown in economic growth is expected for the coming quarters, but the call about if this should affect the stock market is left to you.