Nifty is in a downtrend, which will get over if it closes above 7,655
We had mentioned in Monday’s closing report that Nifty, Sensex were on an uptrend again and that a close below 7,700 would be the first sign of a trend change. The major indices of the Indian markets suffered a sharp correction of more than 2%. The trends of the major indices in Tuesday’s trading are given in the table below:
Negative global cues, along with profit booking and weak crude oil prices, plunged the Indian equity markets on Tuesday. In the process, the key indices of the Indian equity markets closed the day's trade deep in the red. The BSE market breadth favoured the bears -- with 1,620 declines and 888 advances. In contrast, the indices had closed in the positive territory on Monday. It had ended Monday's trade with a gain of 0.51%, while the Nifty inched up 0.59%.
India's central bank on Tuesday cut its key lending rate by 25 basis points (bps) in line with overall expectations, comforted by the central government's fiscal prudence steps, a cut in interest rates on small savings rates and moderate inflation. The repurchase rate, or the short-term lending rate for commercial banks on loans taken from the central bank (Reserve Bank of India), stands lowered to 6.5% from 6.75%. The reverse repurchase rate, or the short-term borrowing rate, has been adjusted upward to 6% from 5.75%. The changes were carried out in the monetary policy for the current fiscal announced by Reserve Bank of India (RBI) Governor Raghuram Rajan on Tuesday. Among the two key instruments to directly regulate the money flow in the system, the cash reserve ratio (CRR), which is the quantum of liquid funds against deposits which commercial banks have to hold, has been left unchanged at 4%. But the minimum daily maintenance of CRR has been cut to 90% from 95%. Similarly, the statutory liquidity ratio, or the value of specified securities which commercial banks have to subscribe to, stands at 21.25%, effective from April 2. The central bank had last cut its short-term lending rate in September by 50 basis points to 6.75%. Cumulatively, 2015 saw the monetary authority cut the repo rate by 1.25%. "Inflation has evolved along the projected trajectory and the target set for January 2016 was met with a marginal undershoot," Rajan said in his policy statement, adding that retail inflation was expected to decelerate modestly and remain around 5% in this fiscal. "After two consecutive years of deficient monsoon, a normal monsoon would work as a favourable supply shock, strengthening rural demand and augmenting the supply of farm products that also influence inflation," he said. "On the other hand, the fading impact of lower input costs on value addition in manufacturing, persisting corporate sector stress and risk aversion in the banking system, and the weaker global growth and trade outlook could impart a downside to growth outcomes going forward," he said. He said the growth projection for 2016-17 was being retained at 7.6%. The RBI governor declared that the stance of monetary policy will remain accommodative.
US stocks ended lower amid falling oil on Monday, as the country's factory orders came out weaker than expected. Oil prices reversed early gains to end sharply lower on Monday and continued to head lower on Tuesday. The central parity rate of the Chinese currency renminbi, or the yuan, weakened 78 basis points to 6.4663 against the US dollar on Tuesday, according to the China Foreign Exchange Trading System. In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2% from the central parity rate each trading day, Xinhua news agency reported. The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.
Shares in Shanghai gained on Tuesday, while Hong Kong stocks dropped. The benchmark Shanghai Composite Index ticked up by 0.97%, or 29.05 points, at 3,038.58 at mid-day, while the Shenzhen Composite Index, rallied by 1.75%, or 33.36 points, at 1,934.88. In Hong Kong, the blue chip Hang Seng Index tumbled by 1.40%, or 286.68 points, at 20,212.24. China stocks rose on Tuesday as a series of government support measures and improving economic data revived investors' appetite for riskier assets, though thin trading volume indicated that confidence remains fragile. Hong Kong shares dropped because they were pulled lower by the energy sector against a backdrop of slumping crude oil prices and mixed messages on the outlook for U.S. monetary policy.
The Nikkei average plunged to close at its lowest level in about seven weeks on Tuesday, with the market beaten by risk-averse selling in the wake of the firmer yen, setbacks on Wall Street and falling crude oil prices.
The top gainers and top losers of the major indices are given in the table below:
The closing values of major Asian indices are given in the table below: