If Nifty stays above 7,100, it can head higher
We had mentioned in Tuesday’s closing report that Nifty, Sensex were in no-man’s land and that Nifty has to go back above 7,100 for the rally to continue. Nifty inched up above 7,100 and there was a minor rally for the major indices of the Indian equity markets to gain around 0.8% over Tuesday’s close. The trends of the major indices of the Indian stock markets on Wednesday are given in the table below:
Positive European indices, steep rise in crude oil prices and value-buying buoyed the Indian equity markets on Wednesday. The late surge in the markets came after panic selling and the dwindling rupee value had depressed investor sentiments during most of the day's trade. Initially, both the indices of the Indian equity markets opened on a positive note, as a result of healthy gains made in the US markets on Tuesday. Notwithstanding the rise, caution selling and profit bookings on the back of rising non-performing assets (NPAs) levels of the banking sector dragged the markets lower. The BSE market breadth favoured the bears -- with 1,778 declines and only 612 advances.
Moreover, 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 during the upcoming session. The central government is expected to push through major economic legislations like bankruptcy code and Goods and Services Tax (GST) Bill during the upcoming Budget session.
In addition, a weak rupee dented the equity markets. The Indian rupee opened on a weak note, down 14 paise to 68.52 against a US dollar from its previous close of 68.37-38 to a greenback. During the intra-day trade, the Indian rupee touched its lowest level since late August-early September 2013 at 68.67-level on spot.
Furthermore, the continued selling pressure from the foreign institutional investors (FIIs) dragged markets lower. The data with stock exchanges showed that FIIs divested Rs964.19 crore on Tuesday. Investors were also seen cautious ahead of Federal Reserve's January meeting minutes which are expected to be released later in the day and the upcoming macro-data on German consumer confidence. But, a positive opening to the European markets gave a boost to investors’ sentiments. Value buying was witnessed at the lower levels.
China's stocks closed higher on Wednesday, with the benchmark Shanghai Composite Index up 1.08% -- to close at 2,867.34 points. Tokyo stocks ended lower on Wednesday as a stronger yen and falling oil prices dented investor-sentiment and saw early gains reversed. The 225-issue Nikkei Stock Average dropped 218.07 points, or 1.36%, from Tuesday to finish the day at 15,836.36.
The top gainers and top losers of the major indices are given in the table below:
The closing values of the major Asian indices are given in the table below: