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The bias will remain upwards as long as Nifty does not go below last week’s low
Today the indices opened marginally higher and tried moving higher. It was soon followed by a highly volatile session with the indices occasionally trading in the negative. In the last hour of the session the benchmark hit its day’s high but it could not sustain at that level and moved to the low of the day. We had mentioned in Friday’s closing report that as long as CNX Nifty does not go below the day’s level, it can go up to 8,000-8,050.
S&P BSE Sensex opened at 26,694 and moved in the range of 26,518 and 26,716 while Nifty opened at 7,978 and moved between 7,935 and 7,992. Sensex closed at 26,597 (down 29 points or 0.11%) while Nifty closed at 7,959 (down 10 points or 0.12%). NSE recorded a lower volume of 73.88 crore shares. India VIX rose 3.54% to close at 13.3850.
Among the other indices on the NSE, the top five gainers were Pharma (1.99%), Smallcap (1.82%), IT (1.69%), Media (1.09%) and Midcap (0.86%) while the top five losers were FMCG (1.04%), Metal (0.94%), Bank Nifty (0.86%), Finance (0.77%) and Dividend Opportunities (0.70%).
Of the 50 stocks on the Nifty, 19 ended in the green. The top five gainers were Sun Pharma (3.64%), TCS (3.35%), Gail (2.41%), Power Grid (2.19%) and Hindalco (2.07%). The top five losers were Jindal Steel (3.89%), DLF (2.68%), Kotak Mahindra Bank (2.18%), Tata Steel (1.74%) and Coal India (1.55%).
Of the 1,587 companies on the NSE, 1,003 companies closed in the green, 536 companies closed in the red while 48 companies closed flat.
Prime Minister Narendra Modi is on a five-day official visit to United States starting 26 September 2014. The Indian Prime Minister will meet US President Barack Obama at the White House on 29-30 September 2014. The two leaders will discuss a range of issues of mutual interest in order to expand and deepen the US-India strategic partnership.
The Reserve Bank of India (RBI) undertakes its bi-monthly monetary policy review on Tuesday. Strides Arcolab (9.20%) was the top gainer in ‘A’ group on the BSE. Its board of directors have approved a scheme of amalgamation between the company and Shasun Pharmaceuticals wherein, Shasun Pharma will amalgamate with the company. They foresee the combined entity to be amongst the top 15 listed Indian pharmaceutical companies by revenue with a turnover in excess of Rs2,500 crore. On the other hand, the company has also entered into an agreement with GMS Holdings whereby GMS will invest USD 21.90 million for a 25.1% stake in Stelis Biopharma Private Limited, the biotech arm of Strides, to fund its greenfield project. The transaction is expected to close in Q4 of 2014.
Suzlon Energy (4.90%) continued to be the top loser in ‘A’ group on the BSE today. GMR Infrastructure (4.40%) was among the top two losers in the group. It clarified on Friday that in view of the cancellation of 214 coal blocks by Supreme Court, Rampia, coal block allocation in the state of Odisha also stands cancelled. GMR Group is one among the six stakeholders. It said that the mine could not be developed on account of variety of reasons beyond the control of the developers.
The software stocks TCS (3.17%), Infosys (1.90%) and Wipro (1.18%) in the Sensex 30 pack were among the top six gainers today.
Tata Steel (1.61%) was among the top two losers in the Sensex 30 stock. B Muthuraman, vice-chairman of the company, after his 48-year of association with the company, has stepped down from the board of the company on Friday.
US indices closed in the positive on Friday.
The US economy grew at its fastest pace in 2-1/2 years in the second quarter with all sectors contributing to the jump in output in a bullish signal for the remainder of the year. The Commerce Department on Friday raised its estimate of gross domestic product to show the economy expanded at a 4.6% annual rate.
Asian indices showed mixed performance. Nikkei 225 (0.50%) was the top gainer while Hang Seng (1.90%) was the top loser.
Chinese industrial profits fell 0.6% in August from a year earlier, reversing from July's 13.5% rise, the government said on Saturday adding to problems such as unsteady exports, a housing downturn and cooling investment growth in the world's second largest economy.
European indices were trading in the red. US Futures were trading hugely in the negative.
Although vegetable prices moderated sharply in September, the central bank will keep the interest rates at current levels for a prolonged period, says Nomura
The Reserve Bank of India (RBI) will keep the interest rates at current levels for a prolonged period to achieve an inflation at around 6% by January 2016 based on consumer price index (CPI), says Nomura in a research report. The RBI will announce its fourth bi-monthly monetary policy on Tuesday.
Nomura said, "Positive real policy rates, lower minimum support prices and a moderation in rural wages all suggest that, while the inflation path will be bumpy, a gradual disinflation should continue."
According to the data from Ministry of Consumer Affairs, vegetable prices moderated sharply (by about 8% month-on-month) in September following sharp increases over the previous two months. "This significant fall in addition to favourable base effect should help lower CPI inflation to nearly 7% y-o-y in September from 7.8% in August," Nomura said.
According to the research note, base effects over the next two months remain significant, and if the downtrend in vegetable prices continues, CPI inflation will likely drop significantly over the next three readings before rising back up in first quarter of 2015 to the 7.0%-7.5% range.