Nifty will head higher, as long as, Monday’s low holds
We had mentioned in last week’s report that the NSE’s CNX Nifty may put in a rally. Following optimism on most of the Asian indices, the 50-share benchmark back home also showed a positive trend on Monday. The positive opening on the Nifty was followed by a range bound session in the green upto 12.50pm after which it gained further momentum and was pushed higher. By the end of the session, the index hit a three day high and closed near to it.
The S&P BSE Sensex opened at 27,656 while Nifty opened at 8,391. The benchmarks moved from the lows of 27,625 and 8,381 to the high of 28,018 and 8,505. Sensex closed at 27,976 (up 517 points or 1.88%), while Nifty closed at 8,492 (up 151 points or 1.81%). Today’s gain on the Sensex has been the highest since 15 January 2015. Bank Nifty too gained momentum today and after opening at 18,160 it moved in the range of 18,089 and 18,393 and closed at 18,362 (up 317 points or 1.76%). However, NSE recorded a lower volume 70.80 crore shares. India VIX fell 1.64% to close at 14.2625.
The Reserve Bank of India (RBI), in a discussion paper had said that a bank's Large Exposure (LE) limit in respect of each counterparty, which includes a group of connected counterparties, will be capped at 25% of the bank's eligible capital base. For this purpose, the eligible capital base will be defined as the Tier 1 capital of the bank as against 'Capital Funds' at present. The proposed LE framework will be fully applicable from 1 January 2019. The RBI has placed the discussion paper on the proposed LE framework on its website and has sought comments on it by 30 April 2015.
The RBI has relaxed norms for non-performing assets provisioning on Monday according to which now banks can use 50% of their floating provision for specific NPA provision as compared to 33% earlier.
Speaking at the Confederation of Indian Industry's (CII)’s 6th Capital Markets Summit in Mumbai BSE chief Ashish Chauhan said that India would need to raise as much as a $100 billion in equity capital a year to meet capital requirements for the country's growth.
Credit rating agency Moody’s said the Indian government’s latest plan to revive the stranded gas-based power generation capacity through imports will help save $16 billion worth of investments and banks including IDBI, State Bank of India (SBI) and ICICI are set to be the biggest beneficiaries of the plan.
The Railways will increase its freight rates for several commodities including grains, pulses, urea, coal and cement from 1st April as proposed in the Railway Budget 2015-16.
Coming back to the Indian stock markets, NCC (9.59%) was the top gainer in ‘A’ group on the BSE. The stock hit its 52-week high today. Rasoya Proteins (4.92%) was the top loser in the group.
Bharti Airtel (3.55%) was the top gainer in the Sensex 30 pack. Out of the spectrum sale recently, the company gained capability to provide 4G services across the country.
Hindalco (1.61%) was the top loser in the Sensex 30 stock.
On Friday, US indices closed in the green. Fed Chair Janet Yellen on Friday said that she expects the Federal Reserve to raise interest rates this year, and that subsequent increases will be gradual without following a predictable path.
Gross domestic product (GDP) expanded at a 2.2% annual rate, unrevised from last month's forecast, the Commerce Department said on Friday in its third estimate. The economy grew at a 5% rate in the third quarter.
Except for NZSE 50 (0.56%) all the other Asian indices closed in the green. Shanghai Composite (2.59%) was the top gainer.
China unveiled more details and projections for its "New Silk Road" plan to boost trade and economic relations with the rest of Eurasia and Africa. In Japan, the latest data showed that factory output fell by a worse-than-expected 3.4% in February.
European indices were trading in the green. US Futures too were trading higher.
Greece's creditors are reportedly studying new reform plans put forward by Prime Minister Alexis Tsipras' government in a bid to secure further bailout funds.
Global credit rating agency Fitch Ratings on Friday downgraded Greece's sovereign-debt rating to "CCC" from "B", citing "uncertain prospects of timely disbursement from official institutions".
The European Commission's economic sentiment indicator rose by 1.6 points to 103.9. Confidence in the euro zone's economy rose for a fourth straight month in March to its highest since July 2011, a European Commission survey showed on Monday.