makin97 NSETIPS @ RAKESH MAKIN: MARKET ENDED 22.03.2010

Monday, March 22, 2010

MARKET ENDED 22.03.2010

MARKET ENDED 22.03.2010 MONDAY

SENSEX 17410.57 -167.66

NIFTY 5205.20 -57.60

NASDAQ 2374.41 -16.87

DJIA 10741.98 -37.19

RS/$ 45.48 +00.01

Indian markets reacted negatively to Reserve Bank of India’s surprise move to raise the repo and reverse repo rates by 25 basis points each ahead of its policy announcement next month. This move had a negative impact on the rate-sensitive sectors on fears that banks will sooner than later be forced to follow suit.
According to experts, the central bank may go for another rate hike next month. We expect the RBI to hike rates again in the April policy and cumulatively by an additional 100bps in 2010
National Stock Exchange’s Nifty ended at 5205.20, down 57.6 points or 1.09 per cent. The index touched intraday low of 5187.05 and high of 5260.95 intraday.
Bombay Stock Exchange’s Sensex closed at 17,410.57, down 167.66 points or 0.95 per cent. The index touched a low of 17337.38 and high of 17559.18 in today’s trade.
On a weekly basis, the market is still in rising top and rising bottom formation, which is a sign of bullish continuation. If we look at the chart closely, we can clearly observe that the index is forming a rising parallel channel and that may lift the market up to 5360/5390 (17900/18000) in the near term.
As the current run up was ‘over retraced’ we may expect correction in the market and that may come on the back of Bank Rate rise from the RBI. As per technicals, it will be an opportunity to buy on dips with an upside target of minimum 5370/17900 in the near term.
BSE Midcap Index was down 1.05 per cent and BSE Smallcap Index moved 0.85 per cent lower.
Amongst the sectoral indices, BSE Realty Index fell 3.88 per cent, BSE Metal Index declined 1.96 per cent and BSE Auto Index slipped 1.73 per cent. BSE Healthcare Index was up 0.26 per cent.
With this rate hike, RBI has given a signal of higher interest rate environment ahead. While the growth momentum in the economy has picked up, credit offtake remains sluggish we believe banks are unlikely to increase the interest rates in a jiffy. Banks with a strong deposit franchise to benefit in a rising interest rate environment such as Axis Bank, ICICI Bank, PNB, SBI and BOB,” said an HDFC Securities note.
Jaiprakash Associates (-4.89%), Hindalco Industries (-3.93%), DLF (-3.91%), Suzlon Energy (-3.62%) and SAIL (-3.34%) ended with losses.
Sensex gainers comprised Reliance Communications (1.88%), Bharti Airtel (1.43%), HDFC Bank (1.11%), Tata Consultancy Services (0.6%) and Sun Pharmaceuticals (0.39%).
Market breadth was extremely negative, with 1,853 declines against 988 advances on the BSE.
European markets were also in the red. FTSE 100 slipped 0.55 per cent, CAC 40 was down 0.63 per cent and DAX moved 0.48 per cent lower.