Rallies will meet with selling
In Monday’s closing report we had mentioned that Nifty and Sensex will head lower. The index opened with a big gap down and far from recovering was gripped by continuous bouts of selling. At around 10.00 am it reached 8,200 and traded closer to this level up to around 2.15 pm. The index then crashed further and in the last hour of the session gave up a further 73 points.
S&P BSE Sensex opened at 27,694 while S&P CNX Nifty opened at 8,325. The benchmarks hit their respective high at the same level at which they opened and moved lower to hit a low of 26,937 and 8,111. Sensex closed at 26,987 (down 855 points or 3.07%) while Nifty closed at 8,127 (down 251 points or 3.00%). NSE recorded a volume of 87.25 crore shares. India VIX rose 23.09% to close at 17.4200. Expect the market to head lower.
The Union Cabinet on Monday approved the proposal of the Department of Telecom to proceed with auction in 800, 900 & 1800 MHz bands. Total of 380.75 MHz in 800,900 & 1800 MHz is being put to auction.
Growth in India's service sector activity moderated last month, according to a survey from HSBC Holdings Plc and Markit Economics, released today. The seasonally adjusted HSBC India Services PMI Business Activity Index declined to 51.1 in December 2014, from 52.6 in November 2014. Both, activity and new orders in India's services sector expanded in December at lower rates compared as to November.
Oil prices sank to 5 and half year lows on Tuesday as worries over excess supply increased. With the slide in the price Moody’s says that it may force oil companies globally to lower their spending by up to 40% in 2015.
The year 2015 is likely to see lower rates to support growth and the Reserve Bank of India is expected to cut key policy rates by 0.25% in February's monetary policy review meet, says a Bank of America Merrill Lynch report.
Gujarat State Petronet (3.89%) was the top gainer in ‘A’ group on the BSE. The stock hit its 52-week high today. Jubilant Life (3.69%) was among the top two gainers in the group. It got ANDA final approval from the US FDA for Valsartan Tablets USP, 40 mg, 80 mg, 160 mg and 320 mg, the generic version of Diovan® (of Novartis), used as an anti-hypertensive. The current annualized US market size for Valsartan Tablets USP, 40 mg, 80 mg, 160 mg, and 320 mg as per IMS is USD 2 billion.
Dewan Housing Finance (6.80%) was among the top two losers in the ‘A’ group on the BSE. The stock hit its 52-week high yesterday.
Except for Hindustan Unilever (1.89%) all the other companies in the Sensex 30 pack ended in the red. ONGC (5.89%) was the top loser. Deutsche bank has upgraded Hindustan Unilever to 'buy' from 'hold' and also raised its target to Rs900 from Rs700.
On Monday, US indices closed deeply in the red. The Fed will release minutes of the Federal Open Market Committee (FOMC) meeting held on 16 and 17 December 2014 on Wednesday.
Except for Shanghai Composite (0.03%), all the other Asian indices closed in the red. Nikkei 225 (3.02%) was the top loser.
The HSBC China services purchasing managers index rose to 53.4 in December from 53.0 in November, HSBC Holdings PLC said today.
In Japan, the business activity index expanded at an accelerated pace in December, the latest survey from Markit Economics revealed today with a PMI score of 51.7, up from 50.6 in November.
European indices were showing mixed trading while US Futures are trading in the green. In Europe, uncertainties over the status of Greece including a possible exit from the Eurozone are likely to persist until the early election later this month.