If Nifty stays above today’s low, it may try to rally above 8,000
We mentioned in our Monday closing report that indices will move sideways. Today for most of the session, this was so. Even though the Indian indices shot up and down in the afternoon, on a closing basis it hardly moved much. On Monday, we had mentioned that the bias would remain upwards as long as NSE’s CNX Nifty does not go below last week’s low. We continue to believe so.
The S&P BSE Sensex opened higher at 26,611 while NSE’s 50-share benchmark opened lower at 7,949. Both the Sensex and Nifty managed to hit a four-day high (including today) at 26,851 and 8,031. However, thanks to massive selling, during the last hour of trading, both the indices hit their respective low at 26,481 and 7,924. Sensex closed at 26,631 (up 33 points or 0.13%) while Nifty closed at 7,965 (up 6 points or 0.07%). NSE recorded a volume of 87.86 crore shares. India VIX fell 1.79% to close at 13.1450.
Among the other indices on the NSE, the top five gainers were Media (2.05%), Pharma (1.28%), MNC (0.94%), FMCG (0.90%) and Consumption (0.79%) while the top five losers were Realty (2.52%), Metal (1.10%), Infra (0.70%), PSU Bank (0.61%) and Bank Nifty (0.53%).
Of the 50 stocks on the Nifty, 24 ended in the green. The top five gainers were Zee Entertainment (3.49%), BPCL (3.22%), Sun Pharma (2.42%), HDFC (2.17%) and Maruti (1.74%). The top five losers were DLF (5.05%), Bhel (4.24%), Power Grid (3.12%), IDFC (2.38%) and ACC (2.33%).
Of the 1,601 companies on the NSE, 712 companies closed in the green, 810 companies closed in the red while 79 companies closed flat.
The Reserve Bank of India (RBI) kept cash reserve ratio unchanged at 4% of net demand and time liabilities (NDTL). It has reduced the liquidity provided under the export credit refinance (ECR) facility from 32% of eligible export credit outstanding to 15% with effect from 10 October 2014. On the other hand, the RBI has eased norms for importers for hedging foreign exchange risk. The central bank has raised the eligible limit for importers under the past performance route to 100% from the existing 50% i.e., importers can hedge up to 100% of the average of past three years' import turnover or the preceding year's import turnover, whichever is higher, subject to compliance with other conditions applicable for hedging under this route.
Finance Secretary Dr Arvind Mayaram said in Chennai that that the government is committed to an early rollout of the goods and services tax (GST), providing gainful employment to its youth through its skill development programme, fast tracking work on industrial corridors and bringing in the requisite amendments in the Land Acquisition Act to expedite project clearances.
Falling rubber price and upcoming festive season favour auto stocks and auto components sector. Apollo Tyres (5.81%) and MRF (5.23%) were among the top four gainers in the ‘A’ group on the BSE. MRF hit its 52-week high today. Bajaj Auto (1.96%) and Maruti (1.85%) were among the top four gainers in the Sensex 30 pack.
Real estate stocks were at the losing end today. Indiabulls Real Estate (5.33%), Unitech (4.77%) and DLF (4.77%) were among the top five losers in the ‘A’ group on the BSE.
The government has cancelled approvals of nine special economic zones, including that of Hindalco Industries, Essar and Adani as no "satisfactory" progress was made to execute the projects. Hindalco (1.69%) was among the top three losers in Sensex 30 stock.
US indices closed Monday in the red.
Except for Shanghai Composite (0.26%) and Taiwan Weighted (0.07%) all the other Asian indices closed in the red. Hang Seng (1.28%) was the top loser.
Activity in China's vast factory sector showed signs of steadying in September as export orders climbed, a private survey showed on Tuesday, easing fears of a hard landing but pointing to a still-sluggish economy facing considerable risks. The final HSBC/Markit Manufacturing Purchasing Managers' Index(PMI) hovered at 50.2 in September, unchanged from the August reading which was a three-month low, but lower than a preliminary reading of 50.5. A sub-index measuring new export orders, a gauge of external demand, expanded to a 4-1/2-year-high of 54.5, though domestic demand appeared soft. The 50 mark separates expansion from contraction in activity on a monthly basis.
European indices were showing mixed performance while US Futures were trading higher.
German unemployment unexpectedly increased in September, the country's labour agency said Tuesday, suggesting that the labour market in Europe's largest economy is beginning to weaken after a contraction in output last quarter.