As long as Nifty stays above 7,670, the market will head higher
We had mentioned in Monday’s closing report that Nifty, Sensex has averted the downtrend for now and that Nifty would have to stay above 7,630 for the bullish trend to continue. Optimism in the Indian stock markets continued with the major indices making small gains over Monday’s close. The latest news to attract optimistic investors was the forecast for a favourable monsoon from the Indian Meteorological Department. The trends of the major indices in Tuesday’s trading are given in the table below:
Ahead of the release of data on factory output and retail inflation, key Indian benchmark indices were trading higher on Tuesday. At the BSE, good buying was observed in auto, industrials and oil and gas sectors, while selling pressure was seen in metal sector; 26 shares were up and four were down -- three of them from the pharmaceuticals sector.
The overall optimism is not leading to a bigger rally, as there is caution on corporate earnings in the season for quarterly results. Asian markets showed a somewhat mixed trend with Japanese benchmarks up and those in China trading lower.
The Coal India board approved “giving up of performance incentive for supply of higher grades of coal (G5 and above) in the Model Fuel Supply Agreement for power and non-power with immediate effect and to improve lifting of coal," the company said in regulatory filing to BSE. The miner said this decision was taken due to fall in international coal prices and improved supply by it. There is sluggishness in coal demand in general and higher grade of coal in particular, the company said. CIL shares closed at Rs274.45, down 2.28% on the BSE.
Bharti Airtel's recent acquisition of Aircel's 4G airwaves in eight circles for Rs3,500 crore through a spectrum trading deal is credit-positive, rating agency Moody's Investors Service report said here on Tuesday. “Despite the slight increase in leverage, the spectrum acquisition from Aircel is credit positive as it further extends Bharti's 4G footprint across all circles making it a pan India 4G operator,” the report stated. The company has rolled out 4G services in a total of 427 cities across 14 circles already, as it had secured a pan-India data enablement in the 2010, 2014 and 2015 auctions, through a combination of the 900Mhz, 1800Mhz and 2300Mhz bands. Bharti Airtel shares closed at Rs349.55, up 0.34% on the BSE.
Aluminium major Nalco said on Monday that it will set up a joint task force with Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO) to deliberate on a proposed smelter and gas-based power plant in Chabahar Free Trade Zone. The joint task force will be comprised of senior projects, operations and marketing executives of Nalco, directors of Iran's ministry of industries and senior executives of Iranian Aluminium Company (IRALCO), said Nalco statement. "The project would help Nalco to use low cost energy available in Iran for conversion of its alumina, presently exported to international markets, to aluminium. The aluminium products from the joint venture company are expected to be highly cost competitive combining the advantages of low cost Nalco alumina and low cost Iranian energy," said Nalco CMD Tapan Kumar Chand, who is in Iran as part of Indian business delegation, led by Petroleum and Natural Gas Minister Dharmendra Pradhan. Nalco shares closed at Rs39.20, down 1.26% on the BSE. Gail India's shares closed at Rs365.20, up 3.87% on the BSE, following tariff revision and increased revenue forecast.
US stocks reversed early gains to end lower as big US companies are reporting their quarterly results this week. The Dow Jones Industrial Average fell 20.55 points, or 0.12%, to 17,556.41 on Monday. The S&P 500 lost 5.61 points, or 0.27%, to 2,041.99. The Nasdaq Composite Index decreased 17.29 points, or 0.36%, to 4,833.40. US material company Alcoa, seen as an unofficial start to quarterly earnings season, will post results after the market closes. Big bank earnings, starting with JPMorgan Chase & Co on Wednesday, will be watched closely this week. Experts said that market expectations for profit growth are low amid the sluggish world economy, a strong dollar and declining commodity prices. According to Thomson Reuters, the blended earnings of the S&P 500 companies in the first quarter of 2016 are expected to decline 7.7% year-on-year, while the revenue is forecast to decrease 1.3%. Wall Street also kept a close eye on oil recovery. Oil prices extended gains on Monday, with US oil settling above $40 a barrel for the first time since March 22, as crude producer countries are scheduled to meet on Sunday in Doha to discuss the output freeze. Indian investors watching quarterly earnings results from Indian corporates are also showing caution in the Indian stock markets. The top gainers and top losers of the major indices are given in the table below:
The closing values of the major Asian indices are given in the table below: