The indices will move sideways for some time
The S&P BSE Sensex closed the week that ended on 12th December at 27,351 (down 1107 points or 3.89%), while the NSE's CNX Nifty ended at 8,224 (down 314 points or 3.68%). From here, the indices will move sideways for some time. At the end of the previous week, we had mentioned that as long as Nifty continues to remain above 8,500, the rally may continue.
On Monday, Nifty had a weak opening followed by a gradual downwards move, closing in the red for a second consecutive session. Nifty closed at 8,438 (down 100 points or 1.17%). The loss on the index was the highest since 16 October 2014. Weak data from Asian markets affected market sentiments.
Japan's revised third-quarter gross domestic product showed the economy shrank more than initially estimated, with growth contracting an annualised 1.9%. Chinese exports rose just 4.7% on year, compared to October's 11.6% rise. Imports sank 6.7% in November against a 4.6% rise in October.
As anticipated on Monday, the weakness on the index continued on Tuesday making the Nifty close near the day’s low. Nifty closed at 8,341 (down 98 points or 1.16%). Finance Minister Arun Jaitley was quoted as saying that there is no cause for concern about the forex reserves and they are at a comfortable level. He also mentioned that the excise duty hike on November 12 and December 2 will fetch the exchequer Rs6,000 crore and Rs4,500 crore respectively in the remaining months of FY2014-15.
Market bounced back a bit on Wednesday on the back of positive news. Nifty closed at 8,356 (up 15 points or 0.18%). There were reports that the Parliamentary Select Committee cleared the government's proposal of a composite cap of 49% on foreign investment in the insurance sector. The Appellate Body of the World Trade Organization also ruled against the US imposing high duty on imports of certain Indian steel products.
The downtrend on the Nifty resumed on Thursday with the index hitting its lowest since 31 October 2014 and closing in the negative. Nifty closed at 8,293 (down 63 points or 0.75%).
The Union Cabinet chaired by the Prime Minister, Narendra Modi, on Wednesday, gave its approval for allowing public sector banks to raise capital to meet their additional capital requirements under BASEL-III by diluting Government holding upto 52% in a phased manner.
Weakness in European indices pulled Nifty further lower on Friday. Nifty although opened in the green subsequently moved lower and closed at 8,224 (down 69 points or 0.83%).
The government's total indirect tax collections jumped 19.4% to Rs44,060 crore in November 2014 over November 2013, according to provisional figures released by the finance ministry on Thursday.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were: