Nifty continues to remain weak. A close above 8,200 is needed for the downmove to end temporarily
The S&P BSE Sensex closed the week that ended on 5th June at 26,768 (down 1,060 points or 3.81%), while the NSE’s CNX Nifty closed at 8,115 (down 319 points or 3.78%). We had mentioned that Nifty may struggle to head higher and for it to keep rallying, it has to stay above the 8,400 level. Although the week began with the index closing above this level, it could not sustain and from Tuesday, it gave up gains.
On Monday, ahead of the Reserve Bank of India (RBI) second bi-monthly monetary policy review, the 50-stock benchmark witnessed a highly volatile session. Nifty closed at 8,433 (down 0.25 points). The seasonally adjusted HSBC India Purchasing Managers' Index (PMI) hit a four-month high of 52.6 in May 2015, from 51.3 in April 2015, Markit Economics said. Jet fuel price was hiked by a steep 7.5% and rates of non-subsidised cooking gas (LPG) by Rs10.50 per cylinder. Price of aviation turbine fuel (ATF) in Delhi was raised by Rs3,744.08 per kilolitre (kl), or 7.54%, to Rs53,353.92.
On Tuesday, Nifty booked its highest loss since 12 May 2015. Nifty closed at 8,236 (down 197 points or 2.34%). The much awaited RBI monetary policy was in line with the anticipation. RBI cut its benchmark lending rate viz. the repo rate by 25 basis points to 7.25%. The market sentiment was affected by the Met Department downgrading this year's monsoon forecast to 88% of the long-term average from April forecast of 93% of the long-term average. Global news continued to be weak. German unemployment fell in May to the lowest level in 24 years as the recovery in Europe's biggest economy continues, data showed.
Next day, Nifty closed at 8,135 (down 101 points or 1.23%). India's services sector fell back into contraction in May 2015, after experiencing growth for six successive months, the outcome of a survey from Markit Economics showed. The seasonally adjusted HSBC India Services Business Activity Index declined to 49.6 in May 2015, from 52.4 in April 2015. Market was moved lower by negative news like Nestle product, Maggi (noodles), which was put to test for containing lead levels exceeding the prescribed limit and for the use of the taste-enhancer monosodium glutamate without proper declaration.
Maharashtra government has decided to ban the sale of loose cigarettes and it has also banned chewing tobacco in public places.
On Thursday, the 50-stock index closed at 8,131 (down 4 points or 0.05%). Global food prices in May fell to their lowest since September 2009 said United Nations' food agency. The Food and Agriculture Organization's (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 166.8 points in May, down 2.4 points or 1.4% from April, and down 46 points or 22.4% from a year earlier.
On Friday, the series of minor losses continued. Although the 50-stock Nifty managed touching higher levels, it closed marginally on the lower side. Nifty closed at 8,115 (down 15 points or 0.20%). The India Meteorological Department (IMD) announced that the southwest monsoon has set in over Kerala 5 June 2015, four days later than the normal onset date of 1 June.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were: