Nifty may move a bit lower but may find a bottom around 7,600
We had mentioned in Tuesday’s closing report that Nifty, Sensex uptrend may continue and that Nifty is on track to head higher subject to dips. However, the two consecutive sessions of relief rally at the Indian equity markets ended on Wednesday. The major indices of the Indian stock markets were found sliding sharply and the market was back at last week’s levels. The overall trend was bearish through the day. The day’s trends of the major indices are given in the table below:
The indices opened flat in the morning session in line with the global cues, notably from the Asian peers and Wall Street, as investors looked for some early profit-taking after two days of rally. As the day’s trading progressed, the markets were due for a sharp correction of 1.35%-1.92%.
The central government on Wednesday approved six foreign direct investment (FDI) proposals amounting to Rs1,810.25 crore. The largest component of foreign investments that were approved belongs to IIFL Holdings which totalled Rs1,800 crore. The non-banking financial company (NBFC) had sought permission for increasing its foreign equity from 50.16% to 80% via issuing shares to FIIs (Foreign Institutional Investors). Other proposal worth Rs10 crore was approved for Monsoon Capital LLC, which had sought approval for investing in the corpus of a domestic alternative investment trust.
The central parity rate of the Chinese currency renminbi (yuan) weakened by 56 basis points to 6.3796 against the US dollar on Wednesday, according to the China Foreign Exchange Trading System. In China's spot foreign exchange market, the yuan is allowed to rise or fall by two percent from the central parity rate each trading day, Xinhua reported. The central parity rate of the yuan is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.
The US dollar traded mixed against other major currencies on Tuesday amid the country's newly-released economic data. The greenback was supported in early session by an increase in the US inflation. The US Consumer Price Index (CPI) for all urban consumers rose 0.2% in October on a seasonally adjusted basis, in line with market consensus, Xinhua cited the Labour Department report on Tuesday. The index for all items less food and energy (core CPI) rose 0.2% in October, the same increase as in September. The core CPI has risen 1.9% over the past 12 months. The US dollar pared some gains later as the country's industrial data came out negative. US industrial production declined 0.2% in October after decreasing the same amount in September, according to statistics from the Federal Reserve on Tuesday. The dollar index, which measures the greenback against six major peers, was up 0.17% at 99.613 in late trading on Tuesday.
Hit by lower global tea prices, revenue from tea exports during April-August this year fell by nearly 3% at $225.76 million even though export volume in this period grew by 4.35 million kg (mkg). According to provisional data from the Tea Board of India, export volume in the April-August period in 2015-16 fiscal stood at 74.79 mkg as against 70.44 mkg in the like period of 2014-15. The revenue in the same period of the last fiscal stood at $232.57 million as against $225.76 million in the corresponding period of the current fiscal. Average unit prices, measured both in US dollar as well as Indian rupee terms dipped during this period. While each kg of the export sold at an average price of $3.30 during April-August of 2014-15, it dipped to $3.02 a kg in the like months of 2015. Measured in terms of the Indian rupee and adjusted against global currency fluctuations, each kg of tea exported earned revenues of Rs192.71 during April-August of 2014-15 while it stood at Rs198.38 in the year-ago period. Interestingly, although revenues fell when measured in US dollar terms despite the surge in export volume, the same revenue increased when measured in terms of Indian rupee. Against the earning of Rs1,397.41 crore during the beginning till August of the last fiscal, the income increased to Rs1,441.29 crore in the similar period this year.
The top gainers and top losers of the indices are given in the table below:
The closing values of the major Asian indices are given in the table below: