A short-term uptrend is likely as markets finished strongly well above the support of 6,140, mentioned yesterday.
The markets opened in the red, continuing its downtrend from yesterday. However, at 10:45 am, the markets suddenly saw volumes and volatility, shot up to 6,124 within a few seconds from 6,090—all this before Raghuram Rajan announced policy rates. Please refer to the fully story published here. After that, the bulls took control and sent the markets up through the rest of the trading session, well above the support of 6,140, mentioned yesterday.
The S&P BSE Sensex opened in the red at 20,593, then hit intra-day low in early trade at 20,493 before a stunning spike sent the market upwards. It hit an intra-day high of 20,952 before closing strong at 20,929 (up 358.73 points or 1.74%). The Nifty opened at 6,107, hit an intra-day low of 6,079 and then climbed upwards all the way to 6,228 before closing at 6,220 (up 119.80 points or 1.96%).
The breadth of the market was largely positive. Out of 935 stocks, 773 were down, 390 were up and 49 were unchanged. The volumes on the National Stock Exchange were higher, at 63.96 lakh shares compared to yesterday’s 50.25 lakh shares, underscoring the strength.
All the sectoral indices were in the green, with Bank Nifty finishing up 4.35% followed by finance which was up 3.54%.
Of the 50 stocks in the Nifty, 47 stocks advanced and 3 declined, indicating clear strength. The top five gainers were Maruti (8.75%), JP Associates (7.76%), ICICI Bank (6.26%), IndusInd Bank (5.63%) and Axis Bank (5.16%). The top losers were Ranbaxy Jindal Steel (-0.90%), ITC (-0.29%), Bharti (-0.13%).
Today’s markets were dictated by Raghuram Rajan’s decision to hike repo rates. Usually, a rate hike would send markets downwards. But here’s a catch. Investors were worried that Mr Rajan may hike the repo rate by as much as 50 basis points. This didn’t happen.
Instead, as expected, he hiked it by 25 basis percentage points, to 7.75%. The markets were relieved and went up. However, it is unclear how inflation would play out in the future as Mr Rajan continues to be worried about it.
Meanwhile, the global markets took a breather and were seen flat, with Tokyo Nikkei marginally down 0.49%. All the eyes are on the US Fed now. European markets were marginally up across all bourses. US stock futures were trading with a positive bias, with dollar firming up.
The Sensex and the Nifty inched up 1% each during the fortnight, along with ML Mega-cap Index...