Nifty has to remain above 7,800 for the uptrend to continue
We had mentioned in Monday’s closing report that Nifty, Sensex still on an uptrend and that Nifty has to stay above 7,800 for the uptrend to continue. The Indian stock markets traded in a narrow range with a positive bias on Tuesday as investors looked for further cues, especially from parliament on key reforms. The major indices closed with small gains/ losses on Tuesday. The trends of the major indices in the course of the day’s trading are mentioned in the table below:
Lack of major triggers coupled with uncertainty over the upcoming US rate hike subdued the Indian equity markets as the major indices traded flat on Tuesday. Initially, both the bellwether indices of the Indian equity markets opened on a positive note following Monday's late night reforms initiated by the finance ministry along with market regulator and the Reserve Bank of India (RBI). Even a modest growth in the gross domestic product (GDP) for the second quarter, which showed a gradual recovery in the country's economy, cheered the markets. However, the gains were capped after a slowdown in demand was indicated by a lacklustre eight core industries (ECI) and purchasing manager’s index (PMI) data. Nevertheless, investors kept an optimistic outlook with the RBI announcing that it will maintain an accommodative stand on future rate cuts and that the economy is eventually limping towards a marked recovery.
Investors are hopeful that the European Central Bank (ECB) will announce a stimulus package during its next monetary policy meet slated for December 3, after latest data showed that Germany's GDP growth has slowed.
The Indian central bank on Tuesday kept its short-term lending and borrowing rates unchanged, in line with expectations, balancing its policy action between a comforting, 7.4% economic growth for the second quarter of this fiscal and a creeping inflation. In its fifth bi-monthly monetary policy review of the current fiscal conducted by Reserve Bank of India Governor Raghuram Rajan here, the repurchase rate at which short-term credit is extended to commercial banks was left unchanged at 6.75%. Accordingly, the reverse repurchase rate, or the interest paid by the central bank for short-term borrowings, also stood frozen at 5.75%. The statutory liquidity ratio and cash reserve ratio that banks have to keep in liquid assets and government securities also remained intact. The Reserve Bank of India also kept its overall growth projection for 2015-16 at 7.4% and said the inflation target of 6% in January next year as set out in the previous policy update also was within reach, albeit with a slight downside risk.
Rajan, who expressed concern over farm growth and retail inflation, remained neutral on services sector and saw some ray of hope with a pick-up in factory output growth, said: "We're seeing an economy that is well and truly in recovery, but with areas of concern." The governor also sought once again to nudge the commercial banks to cut interest rates.
Leading passenger automobile manufacturer Maruti Suzuki on Tuesday reported a 9.7% rise in its sales for last month. The company sold 120,824 units during the month under review from an off-take of 110,147 units in the corresponding month of 2014. The automobile manufacturer's sales during October rose by 29.1% year-on-year to 134,209 units. Domestic sales during the month under review increased by 10.6% at 110,599 units from 100,024 units sold during November 2014. Exports went up by one percent in the month under review with 10,225 units being shipped out -- up from 10,123 units sold abroad during the corresponding month of 2014. The sales of passenger car segment surged 8.7% to 89,479 units sold during last month - from 82,306 units in the like period of 2014. The company's passenger car segment comprises of brands like Alto, WagonR, Swift, Ritz, Celerio, Baleno, Dzire, Dzire Tour, SX4 and Ciaz. The off-take of utility vehicles which comprises of brands like Gypsy, Ertiga and S-Cross rose by 57.5% at 8,688 units from sales of 5,515 units during November 2014. The sales in the van segment (which includes Omni and Eeco) increased by 1.9% at 12,432 units from an off-take of 12,203 units in the corresponding month of previous year. Maruti Suzuki shares closed at Rs4,552.85, down 0.52% on Tuesday on the BSE.
According to data released on Monday, the Indian economy grew 7.4% in the second quarter ended September, showing some improvement over the 7% expansion in the quarter before but a notch lower than the 8.4% in the same quarter of the last fiscal. The government welcomed the figures, saying they held out hope for achieving 7.5% GDP growth this fiscal. As per official data on gross domestic product (GDP) released by the Central Statistics Office (CSO) under the statistics and programme implementation ministry, the growth of 7.4% was led mainly by expansion in commercial and financial services and manufacturing output. GDP, which is the aggregate market value of all the goods and services produced in the country, had expanded by 8.4% in the corresponding quarter of last fiscal.
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: