Nifty has to head back above 7,150 for the new downtrend to end
We had mentioned in Monday’s closing report that Nifty, Sensex would struggle to rally and that Nifty rally might reverse if it closes below 7,150. The major indices of the Indian stock markets suffered a sharp correction and the losses over Monday’s close were of the order 1.60% and higher. The trends in the day’s trading are summarised in the table below:
The BSE market breadth was heavily tilted towards the bears -- with 1,890 declines and 717 advances. Investors' confidence was eroded by the continuing conflict between the ruling NDA (National Democratic Alliance) and the opposition, which is seen as having a bearing on some key economic legislations that await parliamentary approval. The government is expected to push through major economic legislations like bankruptcy code and Goods and Services Tax (GST) Bill during the ongoing Budget session. In addition, a weak rupee kept investors' unnerved. The rupee opened at 68.66 to a US dollar from its previous close of 68.60-61 to a greenback.
On Monday, the rupee weakened by 14 paise to touch its 30-month closing low. This level was last seen during late August 2013. Besides, softening of crude oil prices, which declined by 1.95% to $32.7 and negative Asian and European markets, deterred investors to chase stock prices higher. Caution also prevailed over the upcoming G20 finance ministers' meet in Shanghai, China.
Automobile major Maruti Suzuki on Tuesday announced that it has resumed production at its facilities in Gurgaon and Manesar. The company had to temporarily suspend manufacturing of vehicles at its flagship facilities in Manesar and Gurgaon on Saturday, due to the transport and other disruption caused by the Jat community's quota agitation. "Maruti Suzuki India has resumed production of vehicles at its facilities in Gurgaon and Manesar, starting Tuesday, February 23 (second half). The supply of components has started gradually," the company said in a regulatory filing with the BSE. "The company had to suspend operations at its facilities from Saturday, February 20 (second half), as supply of certain components was disrupted due to the agitation in Haryana." Currently, the combined output of Maruti Suzuki from Manesar and Gurgaon plants is about 5,000 vehicles per day. Haryana's Jat community, wanting affirmative action, had started a state-wide agitation. The protests and violence accompanying them adversely impacted various companies' ability to get supplies, or ship out their merchandises. The Jat community's quota agitation even crippled rail and road transport to and from the national capital to Haryana, Punjab and Rajasthan. Maruti Suzuki’s shares closed at Rs3,492.50, down 0.87%.
President Pranab Mukherjee said on Tuesday that the country recorded the highest ever software exports during 2015. Addressing the joint session of both houses of parliament, he said that 29 electronic manufacturing clusters were under development. "The country recorded the highest ever software exports during 2015," the president said. “Setting up world-class infrastructure for electronics manufacturing across the country remains a priority for my government," he said. He said the government's endeavour is to scale new heights in space building upon the success over the past year.
Japan shares ended the trading Tuesday lower by erasing gains in the morning session as sentiment here brought by rising oil prices was weighed by the Japanese yen's advance that triggered selling of export-oriented issues. The 225-issue Nikkei Stock Average edged down 59.00 points, or 0.37 percent, from Monday at 16,052.05, Xinhua reported. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was down 8.83 points, or 0.68%, to 1,291.17. Decliners were led by fishery, agriculture and forestry, real estate, and information and communication issues. The day's turnover was about 2,292.5 billion yen (around $20.40 billion).
Chinese stocks closed lower on Tuesday, with the benchmark Shanghai Composite Index down 0.81 percent, at 2,903.33 points. The smaller Shenzhen index closed 0.69% lower at 10,299.67 points, Xinhua reported. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, lost 1.22% to close at 2,218.12 points.
The top gainers and top losers of the indices are given in the table below:
The closing values of the major Asian indices are given in the table below: