Nifty may dip to around 8,850
We had mentioned in last week’s closing report that NSE’s CNX Nifty’s sharp up move may slow down and the index may turn volatile around 8,800. On Tuesday, the positive opening on Nifty was followed by a range bound session up to around 2pm. During this period, the 50-share index moved into negative for few minutes while the S&P BSE Sensex managed to stay above Friday’s close during the entire session. After 2pm, both the benchmarks regained strength and hit a new all-time high.
The Sensex opened at 29,452 while Nifty opened at 8,871. Sensex moved from the low of 29,286 to the high of 29,619 and closed at 29,571 (up 292 points or 1.00%). Nifty moved from 8,825 to 8,925 before closing at 8,911 (up 75 points or 0.85%). NSE recorded a volume of 90.68 crore shares. India VIX rose 1.12% to close at 18.0850.
On Sunday, India and the US broke the 7-year-old logjam in operationalizing their landmark civil nuclear deal besides deciding to jointly produce military hardware including advanced unmanned aerial vehicles during talks between Prime Minister Narendra Modi and US President Barack Obama.
Last week, the Reserve Bank of India (RBI) relaxed rules for companies and banks to restructure and reschedule existing overseas borrowings by permitting an increase in the total cost of external commercial borrowing (ECB). The RBI has also allowed changes in the drawdown and repayment schedules of ECB. However, the easing of rules will not be applicable for foreign currency convertible bonds, the RBI said.
There are reports that senior officials from India and the US will meet after the forthcoming budget session to identify and prioritise sectors for investments and technology sharing.
Finance Minister Arun Jaitley has said fiscal deficit targets for current year are likely to be met and manufacturing sector is showing turnaround signs.
Coming back to stock markets, Jet Airways (14.44%) was the top gainer in ‘A’ group on the BSE. The stock hit its 52-week high today. It was in the news recently, as it came out with attractive offers for economy fares on Jet Airways’ domestic network with travel validity from March 1, 2015 to September 30, 2015.
Gujarat State Fertilizers & Chemicals (11.78%) was the top loser in ‘A’ group on the BSE.
All the bank stocks in the Sensex 30 pack were among gainers. Axis Bank (4.83%) was the top gainer. Other gainers were ICICI Bank (3.58%), HDFC Bank (2.98%) and SBI (0.75%).
Dr Reddy’s Lab (4.01%) was the top loser in Sensex 30 stock. The stock fell ahead of its December 2014 quarter result, when the market is anticipating the company results to lag market expectations.
US indices closed Monday in the green. Except for Shanghai Composite (0.89%) and Hang Seng (0.41%) all the other Asian indices closed in the green. Nikkei 225 (1.72%) was the top gainer.
There was optimism that the actions of Greece's new government won't force the nation to leave the euro currency bloc.
On Tuesday global credit rating agency Moody's Investor Services said Asia will be resilient to global macro-economic challenges in 2015.
European indices were trading sharply lower. US Futures too were trading deeply in the red.
Standard & Poor's Ratings Services on Monday lowered Russia's long-term foreign currency rating to a junk grade of BB+ from BBB-.