Will the RBI rate review help in reversing the slow downturn?
The market managed a flat close with a positive bias on the back of a smart recovery in the last hour. All eyes will now focus on the Reserve Bank of India’s monetary policy review, which takes place tomorrow. Today the Nifty moved almost in the same range as that on Friday and ended just a point above its previous close. We had mentioned in our Friday market report that the Nifty is in an indecisive zone and we may see the trend downward in the medium-term. We continue to maintain the stance. The NSE saw a volume of 53.76 crore shares and the advance decline ratio of 604:1053.
The Indian market opened in the positive following the Cabinet reshuffle, which took place on Sunday wherein 17 new faces were inducted into the government. The reshuffle saw Veerappa Moily taking charge of the petroleum ministry and Jyotiraditya Scindia being appointed as minister of state for power. On the global front, markets in Asia were trading with gains following reports of 2% growth in the US economy for the third quarter of 2012. The US markets will be closed on Monday and possibly Tuesday due to Hurricane Sandy lashing the east cost of the country.
Back home, the Nifty opened one point up at 5,665 and the Sensex resumed trade at 18,656, gaining 31 points over its close on Friday. All-round buying in early trade pushed the benchmarks to their day’s high. At the highs, the Nifty rose to 5,698 and the Sensex climbed to 18,743.
Profit taking at the highs resulted in the market paring some gains and trading sideways in subsequent trade. An increase in the selling pressure in late-morning trade and the Asian market trading lower saw the indices giving up all of their gains and venturing into the negative at around 12.30pm.
The market continued to hover on both sides of its previous close in noon trade as cautiousness set in ahead of the Reserve Bank of India’s monetary policy review, due to take place tomorrow. A negative opening of the key European markets also added to woes of local investors.
Each recovery attempt was met with stiffer resistance, which led the market to its lows at around 2.30pm. At the lows, the Nifty slipped to 5,645 and the Sensex dropped to 18,572.
The benchmarks recovered from the lows with support from oil & gas, consumer durables and healthcare stock, which helped the market close with meagre gains. the Nifty added one point to settle at 5,666 and the Sensex ended the session at 18,636, a gain of 10 points.
Among the broader indices, the BSE Mid-cap index declined 0.43% and the BSE Small-cap index dropped 0.60%.
The top sectoral gainers were BSE Oil & Gas (up 0.62%); BSE Consumer Durables
(up 0.51%); BSE Healthcare (up 0.27%); BSE TECk and BSE IT (up 0.13% each). The key losers were Capital Goods (down 1.69%); BSE Realty (down 0.72%); BSE Power (down 0.68%); BSE PSU (down 0.56%) and BSE Bankex (down 0.28%).
Sixteen of the 30 stocks on the Sensex closed in the positive. The main gainers were Wipro (up 2.56%); Hero MotoCorp (up 1.95%); Tata Power (up 1.82%); Dr Reddy’s Laboratories (up 1.62%) and Reliance Industries (up 1.53%). The major losers were BHEL (down 6.19%); Sterlite Industries (down 2.28%); Tata Motors (down1.80%); Coal India (down 1.11%) and Larsen & Toubro (down 1.08%).
The top two A Group gainers on the BSE were—United Breweries (up 6.51%) and JSW Energy (up 3.10%).
The top two A Group losers on the BSE were—United Spirits (down 9.15%) and BHEL (down 6.19%).
The top two B Group gainers on the BSE were—Baba Arts (up 19.80%) and Aarya Global Shares & Securities (up 18.89%0.
The top two B Group losers on the BSE were—Orissa Sponge Iron & Steel (down 12.35%) and Spectacle Infotek (down 11.11%).
Out of the 50 stocks listed on the Nifty, 26 stocks settled in the positive. The key gainers were Wipro (up 2.54%); Tata Power (up 2.15%); Hero MotoCorp (up 1.73%); Dr Reddy’s (up 1.52%) and Cipla (up 1.51%). The declining stocks were led by BHEL (down 6.58%); Tata Motors (down 2.08%); BPCL (down 1.48%); L&T (down 1.35%) and Coal India (down 1.34%).
Markets in Asia pared early gains and settled mostly lower after a slew of corporates from the region reported lacklustre earnings. The Hong Kong government has introduced a 15% tax on property purchases by overseas and corporate buyers in a bid to cut risks of a housing bubble.
The Shanghai Composite declined 0.35%; the Hang Seng fell 0.16%; the Jakarta Composite dropped 0.18%; the Nikkei 225 shed 0.04%; the Straits Times tanked 0.91% and the Taiwan Weighted settled 0.59% lower. On the other hand, the KLSE Composite added 0.04% and the Seoul Composite ended flat.
At the time of writing, the key European markets were trading 0.58% to 0.88% lower and the US stock futures were in the negative. Financial markets in the US will remain closed on Monday on account of the nation’s capital gears for Hurricane Sandy.
Back home, institutional investors—both international and domestic—were net sellers in the equities segment on Friday. While foreign institutional investors pulled out funds amounting to Rs198.84 crore, domestic institutional investors withdrew Rs89.94 crore from equities.
Vedanta group firm Sesa Goa is likely to miss the production target of about 15 million tonne (MT) for the current fiscal due to mining ban in Goa, a senior company official said today.
During the first half of the fiscal, the company has produced about 3.7 MT iron ore.
However, the mining ban in Goa has affected Sesa Goa's performance in the last quarter. All its operations except met coke and pig iron production are closed. Sesa Goa declined 1.18% to close at Rs167.85 on the NSE.
Coatings and specialty chemicals major AkzoNobel, launched its new initiative at its International Research Centre at Bangalore. The new initiative, India Analytical Centre (IAC), will leverage AkzoNobel’s global and local resources to provide high quality analytical services to fulfil the needs of all coatings businesses in India. The stock gained 1.19% to close at Rs968 on the NSE.
Venus Remedies today said it has received patent from Mexico for its antibiotic drug Vancoplus to combat a wide range of infections. The patent has been granted by Mexico Patent office and is valid till February 2026, Venus said in a release. The stock jumped 4.19% to settle at Rs302 on the NSE.