A close above 8,400 in Nifty will mean a short-term rise
The S&P BSE Sensex closed the week that ended on 24th April at 27,438 (down 1004 points or 3.53%), while the NSE’s CNX Nifty closed at 8,305 (down 301 points or 3.49%).
In the previous week, we had mentioned that the 50-stock Nifty is still under pressure and will have to close above 8,700, as a first step for the downtrend to reverse.
On Monday, a sudden plunge in the last hour of the session made the Nifty hit a 12-day low. Nifty closed at 8,448 (down 158 points or 1.83%). Ratings agency Fitch said the likely upturn in the India's investment climate and reduction in interest rates will improve the property market by the end of March 2016 and provide relief to the debt-ridden developers.
The 50-stock index witnessed a volatile session Tuesday and closed in the red for the fifth consecutive session. Nifty closed at 8,378 (down 70 points or 0.83%). The Indian government plans to auction 69 marginal oil and gas fields owned by state explorers ONGC and Oil India, Oil Secretary Saurabh Chandra said.
On Wednesday, Nifty took support slightly below the level of 8,300 as we had mentioned in Tuesday’s closing report and closed in the positive breaking the trend of five days of consecutive loss. Nifty closed at 8,430 (up 52 points or 0.62%).
The India Meteorological Department (IMD) said that quantitatively the seasonal monsoon rainfall is likely to be 93% of the long period average (LPA) during the June-September southwest monsoon season this year, with a model error of plus/minus 5%. The probability for below normal rainfall is 35%, for deficient 33% and for normal 28%.
Against our anticipation, on Thursday Nifty gave up its gains. The benchmark closed at 8,399 (down 31 points or 0.37%), even though the finance ministry clarified that foreign portfolio investors domiciled in countries that have signed double taxation avoidance treaties with India will not have to pay minimum alternate tax.
On Friday, the loss on the Nifty continued especially after Infosys results disappointed.
Although it reported a marginal growth over the March 2014 quarter, its top line and bottom line fell as compared to the December 2014 quarter. Nifty closed 8,305.25 (down 93 points or 1.11%). We expect the market to remain weak but it is very close to a short-term bottom. If Nifty does not go below 8,250, it may rally for the short-term.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were: