Market Mantra:September 17, 2014

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Market Mantra:September 17, 2014

Nifty failed to hold the 8000 mark on Tuesday as bulls turn cautious ahead of the FOMC (Federal Open Market Committee) outcome today. Intense selling pressure weighed on broader markets yesterday with the mid and the small cap indices falling nearly 4 percent. However, with global markets more optimistic on the Fed outcome, it may be a day for some recovery on Dalal Street today. It was the worst fall for the market in the last 45 days after the Sensex tanked over 320 to close around 26493 and the Nifty was down 109 points to 7933.

The correction in the market should not really surprise anyone though the BJP has reasons to worry following the by‐elections outcome. The Prime Minister is not celebrating his birthday today and has urged well‐wishers to dedicate time to serve the needs for flood‐ravaged Jammu and Kashmir.  Celebrations would anyways be subdued given that few months after sweeping UP, Gujarat and Rajasthan in Lok Sabha polls, the BJP lost 14 of its 24 seats in assembly by‐polls in the three states. The market is expected to open on a positive note.Fed Interest Rate Decisions, Bank of England Minutes and Fed's Monetary Policy Statement are awaited by global investors. Investors like to catch on to words and sometimes it doesn’t matter who says it. For the day it’s a prediction that the Fed will use the words ‘considerable time’ to describe when it may raise rates. We’ll wait to hear more on that today and tomorrow. Global cues are positive today with Asian stocks rising. Japan's Nikkei was up 0.18% and Hong Kong's Hang Seng index was up over 1%.

Economy snippets

·         Government will decide on ending its control on diesel pricing after elections in two states next month, an oil ministry source said, even though local prices of the fuel are currently higher than the global rates, making a case for a cut in retail prices. (BS)

·         Reserve Bank of India governor Raghuram Rajan gave the clearest possible signal that he'll keep interest rates unchanged at the month-end monetary policy announcement, just as the government announced wholesale inflation slowed the most in almost five years in August. (ET)

·         Foreign Investment Promotion Board cleared 21 proposals including that of Bharti Shipyard, but turned down the Sistema Shyam's request to raise foreign holding. (BS)

·         Ahead of the US Federal Reserve meeting outcome, Fed is very cautious of ending the quantitative easing programme. we expects Fed to reaffirm its focus on growth.  the US economy is doing well and inflation expectation has moderated. wwe believes Fed will guide people in the right direction – focus on growth and any movement in interest rates is going to be gradual.

Indian market
		% change
	Last close	1 day	3 mth	YTD
Sensex	26,493	-1.2	3.8	25.1
Nifty	7,933	-1.4	3.9	25.8
BSE 100	8,012	-1.6	3.4	26.6
BSE 200	3,249	-1.8	4.2	28.4
CNX Midcap	11,504	-3.7	6.3	42.5

                 

Bond Market
	Last close	Bps chg
10yr Gsec	8.50	0
Call rate	7.90	0.85

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