For Nifty to keep rallying, it has to stay above 8,400
The S&P BSE Sensex closed the week that ended on 29th May at 27,828 (down 129 points or 0.46%), while the NSE’s CNX Nifty closed at 8,434 (down 25 points or 0.30%). We had mentioned that the uptrend on the Nifty may continue, subject to dips.
On Monday, the 50-stock Nifty opened lower and moved further lower after moving in a range. Its effort to revive after each dip pulled the index further lower. By the end of the session, Nifty hit a four-day low and closed near to it. Nifty closed at 8,370 (down 89 points or 1.05%). The pessimism on the bourse was due to the news making rounds that Greece has doubts that it would have the money to repay to the International Monetary Fund next month.
On Tuesday, the loss on Nifty continued. Nifty closed at 8,339 (down 31 points or 0.37%). Reserve Bank of India (RBI) Governor Dr Raghuram Rajan said that while the country’s macro-economic parameters have improved, growth was still slow in picking up. Meanwhile, finance Minister Arun Jaitley said India has to bring the tax rate to the global level and, at the same time, remove the exemptions.
Chief Economic Advisor Arvind Subramanian said that government expects inflation to remain under control, as it has adequate stocks to deal with shortage of foodgrain in the eventuality of a poor monsoon, which creates the possibility of RBI further easing its monetary policy.
Next day, Nifty recovered 57 points from the day’s low and closed near to the day’s high. However, it still made marginal loss. Nifty closed Wednesday at 8,335 (down 5 points or 0.06%). The Indian government has said that FIPB's approval will not be required for merger and acquisitions in sectors, where FDI is allowed under automatic route. This is a move aimed at further improving the ease of doing business in the country. Meanwhile, Greece's finance minister said that Athens will be able to make its next payment to the International Monetary Fund on 5 June 2015 because it will have reached an agreement with its creditors by then.
The benchmark continued to lose ground on Thursday, closing at 8,319 (down 16 points or 0.19%). Private weather forecaster Skymet has said that conditions are favourable for the onset of Southwest Monsoon in India. It expects the monsoon to hit Kerala around 30 May 2015. The progress of monsoon over Peninsular India is expected to be delayed by a week, according to Skymet.
India's economic growth rate in the January-March quarter is likely to slip to 7.2% from 7.5% in the previous three months, mainly because of lower production and weak global demand, credit rating agency Moody's said.
Only Friday, Nifty opened higher, started dipping mid-way but soon surged higher to a hit five-day (including today) high. Nifty closed at 8,434 (up 115 points or 1.38%). The day’s gain wiped off most of the losses incurred over past four trading session. Market awaits the FY14-15 gross domestic product growth rate and the RBI monetary policy review on 2nd June. Most market players anticipate that RBI may cut the repo rate by 25 basis points.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were: