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Fortnightly Market View: No Mood for Negatives

Market-players are showing deep faith in Modi sarkar and don’t want to see the impediments coming in the Budget

This column is about where the market is headed over the medium term. So, let me come straight to the point. One, this market remains a buy-on-the-dips market. Two, volatility will continue to be higher than what it was before the elections, given the battle between...

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Is the Sensex, Nifty headed for a fall?

Nifty will take a big beating if the Budget disappoints

The S&P BSE 30-share Sensex closed the week that ended on 4th July at 25,962 (up 862 points or 3.43%), while the NSE’s 50-share CNX Nifty closed at 7,752 (up 243 points or 3.23%) for the week. Next week the union budget will be presented. A lot of expectations have been built around the budget. If the budget disappoints, we could see a big correction.

The indices witnessed a huge gain on Monday after the positive news from the US and the higher closing of the Asian indices. Nifty closed at 7,611 (up 103 points or 1.37%). The number of Americans seeking unemployment benefits declined last week, the latest evidence that a sharp economic slowdown earlier this year hasn't caused employers to cut jobs. Back home, the PSU banks were in focus with the news that the government is likely to take a decision on a proposal to create a holding company structure for public sector banks before the budget.

The market continued to rise on Tuesday as well. A survey from Markit Economics showed that growth in the Indian manufacturing sector was maintained in June 2014. Adjusted for seasonal variations, the seasonally adjusted HSBC India Purchasing Managers' Index rose marginally to 51.5 in June from 51.4 in May. Manufacturing production rose for the eighth successive month in June 2014. Nifty closed at 7,635 (up 23 points or 0.31%).

With the fourth day of the consecutive gain Nifty closed at 7,725 (up 91 points or 1.18%) on Wednesday. Finance minister Arun Jaitely said that the fiscal deficit target may be revised for the current fiscal to 4.42% up from the earlier 4.10% set by the earlier government.

On Thursday after hitting a new life time high, the Sensex stopped trading for more than 3 hours due to network outage. The seasonally-adjusted HSBC Services Business Activity Index edged up to a 17-month high of 54.4 in June 2014, from 50.2 in May 2014. Nifty closed at 7,715 (down 10 points or 0.13%).

The Cabinet Committee on Economic Affairs (CCEA) has approved the inclusion of onion and potato under the purview of stock holding limits under the Essential Commodities Act, 1955. This will empower the State Governments to undertake de-hoarding operations and control the prices of onions and potatoes.

Friday was the third consecutive day of the Nifty hitting its new high. The Nifty closed at 7,752 (up 37 points or 0.48%). Finance Minister Arun Jaitley said there is "no panic situation" but asked the states to take measures to crack down on hoarding and black marketing to rein in prices.

For the week, all the other indices on the NSE closed in the positive, the top two performers were Auto (6%) and Pharma (5%).

 Among the Nifty stocks, the top five stocks for the week were Tata Motors (9%); Hindalco (8%); Maruti Suzuki (8%); BHEL (8%) and Sun Pharma (7%) while the top five losers were Hero MotoCorp (1%); United Spirits (1%); Grasim (1%); Tech Mahindra (0.46%) and Bajaj Auto (0.43%).

Of the 1,475 companies on the NSE, 1,101 companies closed in the green, 344 companies closed in the red while 30 companies closed flat.

 Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:
 

ML Top sector

 

ML Worst sector

 

Auto Components

8%

Sugar

-2%

Consumer Durables

7%

Software & IT Services

1%

Con_EPC_Infra

7%

Lifestyle & Leisure

1%

Chemicals

6%

Cement

2%

Textiles

6%

Real Estate

2%

 

User

COMMENTS

vivian clement

3 years ago

The indian markets are overbought and the valuations are high , been a nascent investor ( 5-6 yrs in the markets) I believe this . But everyone is been fooled into buying in these soaring levels. Is this a bubble or a bull market ???

Sensex, Nifty close at a new life time high – Friday closing report
Watch out for a close below the day’s low for reversal on the Nifty

On Thursday we said that the Indian stock markets may give up some gains. There was a sharp decline on Friday just after noon and the market remained weak till about 2.20 pm. After this, it gained strength and hit new all-time highs and closed near to it. 
 
The S&P BSE Sensex opened at 25,845 while CNX Nifty opened at 7,718. Sensex hit a high at a low at 25,659 while Nifty hit a low at 7,661. Both the indices hit its new high at 25,982 and 7,758, respectively. Sensex closed at 25,962 (up 138 points or 0.54%) while Nifty closed at 7,752 (up 37 points or 0.48%). The NSE recorded a volume of 99.65 crore shares. India VIX rose 1.97% to close at 18.1550.
 
Finance Minister Arun Jaitley said there is "no panic situation" but asked the states to take measures to crack down on hoarding and black marketing to rein in prices. The Reserve Bank of India (RBI) will issue the guidelines that will be used to grant on-tap and differentiated banking licenses later this year, deputy governor R Gandhi told the media on Friday.
 
The Oil Ministry may move the Cabinet Committee on Political Affairs (CCPA) soon with the expert panel recommendations of raising kerosene price by Rs4 a litre and cooking gas (LPG) rates by Rs250 per cylinder.
 
Prestige Estate (8.38%), top gainer in the ‘A’ group on the BSE, was in news for that the builder bought 8-acre prime plot in south Bangalore from Siemens for Rs345 crore.
 
Shree Cement (2.11%), among top four losers in the ‘A’ group on the BSE, said that it has commissioned a grinding unit of two million tonnes per annum (mtpa) capacity at Aurangabad in Bihar.
 
Reliance Industries plans to enter the e-commerce of grocery venture by the year-end. It plans to offer express deliveries of fresh fruit and vegetables to homes in Mumbai. The company was the top gainer (2.47%) in the Sensex 30 pack.
 
US indices closed in the positive on Thursday. US markets are closed today for Independence Day holiday.
 
US employers added 288,000 workers to nonfarm payrolls in June, following a 224,000 increase in May that was bigger than previously estimated. A 1.39 million increase in employment over the past six months was the largest since early 2006, while the unemployment rate fell to 6.1%, the lowest level since September 2008.
 
Asian indices showed a mixed performance. Nikkei 225 (0.58%) was the top gainer while KLSE Composite (0.20%) was the top loser.
European indices were showing mixed trading.

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