Nifty has to head above 8,760 for the first signs that the current decline is arrested
In our Monday’s market report, we stated that the benchmark indices—the S&P BSE Sensex and the NSE’s CNX Nifty may be headed lower. Bearish sentiments took over the market in the latter part of Tuesday’s trading session, leading to a decline in the benchmark indices. The overall sentiment in the Indian market remained weak after a steep fall registered a day before. Global market fears affected the indices back home.
Expectations of a mid-year rate hike by the US Federal Reserve and fresh concerns over Greece's bailout deal weighed down on stock markets globally. Most Asian and European indices either closed lower or were trading in the red.
The Nifty opened the day’s trade marginally higher at 8,770 compared to previous day’s close of 8,757. But soon, the index was pulled lower. There were a couple of occasions when the 50-share index moved in to the black, but the fight back was weak. Post-lunch is when investors turned bearish, dragging the Nifty to an intra-day low of 8,677. In the last half hour of today’s session, the market regained some strength to move higher and closed at 8,712 44.70 points or 0.51% lower compared to Monday’s close.
The movement on the 30-share Sensex was no different. The index opened higher at 28,924 compared to Monday’s close of 28,845. The 30-share index managed to hit an intra-day high of 28,949 during the first half, but the second half of today’s trade was dominated by the bears. The index fell to an intra-day low of 28,585. But soon, after hitting this bottom, Sensex regained strength to close the day at 28,709.87 down 134.91 points or 0.47%.
Foreign institutional investors (FIIs) were net sellers of Rs748 crore. Domestic institutional investors were net buyers of Rs290 crore on Tuesday.
Among the 50 stocks present on the Nifty, 32 declined while 17 stocks moved higher and one remained unchanged. The top gainers on the Nifty were Bharti Airtel (6.87%), Coal India (4%), NMDC (1.96%), Mahindra & Mahindra (1.93%) and Zee Entertainment (1.74%). The losers were DLF (-4.44%), HDFC (-3.62%), Jindal Steel (-2.54%), Hindustan Unilever (-2.10%) and Hindalco (-2.06%). On the Sensex, nine stocks gained while the remaining 21 declined.
The Bank Nifty declined by 0.48% to close at 19,054. Federal Bank fell the maximum, by 3.11%. Bank of India (-1.35%), Kotak Mahindra Bank (-0.93%), Canara Bank (-0.84%) and Axis Bank (-0.78%) closed in the red. The top gainers were Punjab National Bank (1.21%), IndusInd Bank (0.94%) and Yes Bank (0.73%).
Telecom stocks, including those of market leader Bharti Airtel, gained significantly; as analysts pointed out that the bidding intensity in the ongoing spectrum auction has reduced drastically.
Auto stocks gained on data released by the Society of Indian Automobile Manufacturers (SIAM). Domestic passenger car sales grew by 6.85% to 1.71 lakh units in February this year as compared with 1.61 lakh units in the same month of 2014. Total sales of commercial vehicles were up 10.1% to 52,843 units from 47,982 units in the year-ago period. Though total sales of vehicles across categories registered a growth of 0.15% to 15.26 lakh units in February 2015 as against 15.24 lakh units same month last year.
The industry body expects a significant increase in demand for medium and heavy goods commercial vehicles (M&HCVs) driven due to government's push to kick start infrastructure projects. They also expect a revival in demand for vehicle, which is likely to drive up commodity prices for automakers. Ashok Leyland (3.58%), Exide Industries (2.81%) and Eicher Motors (2.07%) were the top three gainers on the CNX Auto index.
Most of the sector indices on the NSE closed in the red. CNX Realty, CNX Finance, CNX Energy, CNX PSU Bank and CNX FMCG fell by 2.02%, 1.34%, 1%, 0.66% and 0.50% respectively. Among the top five sector gainers were CNX Metal (0.56%), CNX Media (0.54%), CNX Infra (0.44%), CNX PSE (0.34%) and CNX Auto (0.34%).
Of the 2,965 stocks traded on the BSE, 1,223 stocks advanced, 1,629 stocks declined, while 113 stocks remained unchanged.
The rupee too was weak, as the dollar strengthened on talks of the Fed’s rate hike. The rupee traded at Rs62.7225/$, 0.29% higher compared to its previous close of Rs62.5437/$. The 10-year benchmark government bond yield closed at 7.75% up 0.12% from yesterday’s close.
The US dollar hit multi-year highs against the euro and yen on Tuesday, affecting the stocks in the region as well. The dollar was at a 12-year peak versus the euro and a seven-year peak against the yen.
Among other world indices, top Asian indices closed lower. China’s Shanghai (-0.46%), Hong Kong’s Hang Seng (-0.94%) and Japan’s Nikkei (-0.67%) were the top three losers.
European stocks were trading lower despite the European Central Bank's new bond buying campaign. UK’s FTSE 100 was down 1.56%, Germany’s DAX was down 1.33% and France’s CAC 40 was down 1.18%. US stock index futures too were trading nearly 1% down.