Nifty may suffer an intraday correction tomorrow, if it goes below 5,875

On Wednesday, the BSE Sensex opened marginally higher while the NSE Nifty opened weaker. Both the indices moved in the negative zone for major part of the trading session except for a strong recovery during the last hour.

The Sensex opened at 20,000 and moved lower after hitting the day’s high at 20,056. At the end of the session the index hit an intra-day low of 19,778 and closed at 19,997 (up 0.36 points). The Nifty opened lower at 5,887. It hit its intra-day low in the noon session at 5,833 from where it recovered to hit day’s high at 5,924 in the last few minutes of the trading session and closed at 5,913 (up 16 points or 0.28%).

Except for FMCG (down 1.13%); Energy (down 0.47%); IT (down 0.45%) and Media          (down 0.03%) while all the other indices on the NSE closed in the positive. The top five gainers were PSU Bank (5.33%); Metal (3.15%); Realty (3.04%); Smallcap (2.02%) and Nifty Midcap 50 (1.80%).

Of the 50 stocks on the Nifty, 30 ended in the green. The top five gainers were Bank of Baroda (8.19%); PNB (7.17%); DLF (5.84%); Jaiprakash Associates (5.26%) and Grasim (4.67%). The top five losers were Power Grid (3.08%); Cairn (2.83%); Tata Motors (2.40%); ITC (2.04%) and Hindustan Unilever (1.92%).

One more measure to strengthen the rupee taken, by the Reserve Bank of India (RBI) on Tuesday, was that the banks can raise funds overseas above 50% of their Tier-I capital, with a minimum maturity of three years, and swap these borrowings with the central bank at a concessional rate of a 100 basis points for one to three years. The rate shall be reset after every one year from the date of the swap at 100 basis points lower than the prevailing market rate. The RBI added that banks are free to borrow in any foreign currency but the swaps will be available only for conversion of the US dollar equivalent into rupees and will be computed at relevant cross rates on that day.

Gold will extend a drop into 2014 as the US Federal Reserve tapers stimulus, Goldman Sachs Group said, forecasting that a decision by the central bank to start reducing bond-buying next week may spur renewed selling.

With the threat of military action against Syria easing, the US indices ended in the green on Tuesday. US President Barack Obama called for diplomacy in dealing with chemical weapons in Syria but kept open the possibility of military action against the Assad regime. Obama had called for potential strikes against Syria in retaliation for Syria's use of chemical weapons against civilians in late August. However, with a diplomatic solution on the table, Obama asked Congress to delay a vote on whether to authorize military strikes.

Except for Hang Seng (down 0.17%), Jakarta Composite (down 0.20%) and Straits Times (down 0.50%) all the other Asian indices ended in the green. Seoul Composite was the top gainer, up 0.49%. The US futures were trading flat as were the major European indices.

European indices had a mixed performance, while US Futures were trading lower.