Nifty, Sensex may rally a bit more – Friday closing report

As long as Nifty does not go below today’s level, it can go up to 8,000-8,050


We had mentioned in Thursday’s closing report that we may see the NSE's CNX Nifty enjoy a short bounce back, however, for this it has to stay above the day’s low. On Friday, although the benchmark went below yesterday’s low, it managed to recover from the low and covered up more than half of yesterday’s losses. The upmove got support from Standard & Poor's raising the outlook for India to "stable".

The Indian indices opened Friday lower, S&P BSE Sensex at 26,429 while the 50-share Nifty at 7,886. Sensex managed to recover from the low of 26,220 and reached up to 26,721 while Nifty moved up from the low of 7,842 to 7,993. The benchmarks managed to break past three-day negative trend and closed in the positive. Sensex closed at 26,626 (up 158 points or 0.60%) while Nifty closed at 7,969 (up 57 points or 0.72%). NSE recorded a volume of 103.37 crore shares. India VIX fell 2.78% to close at 12.9275.

S&P raised the outlook for India to "BBB-minus" rating, back to "stable" from "negative". It also said it could raise India's rating if the growth in the economy reverted back to a real per capita gross domestic product of 5.5% per year, and if its fiscal, external and inflation metrics improve.

The Reserve Bank of India (RBI) will undertake its fourth bi-monthly monetary policy review on 30 September 2014.

The Indian government reportedly plans a big cut in diesel prices, while state oil companies are preparing to slash petrol rates ahead of elections, scheduled in Maharashtra and Haryana next month.

Jaiprakash Power Ventures (8.94%), which was the top loser in ‘A’ group on BSE was among the top two gainers in the group on Friday. The company has signed MoU with JSW Energy for selling three operational projects. The announcement comes a day after Jaiprakash Power's proposed sale of three hydro projects to Reliance Power was called off.

Suzlon Energy (4.98%), which has been falling for the past six trading sessions (including today) was the top loser in ‘A’ group on the BSE today. With Friday’s loss, the scrip has crashed 37% since 18 September 2014.

Hindalco (5.25%) was the top gainer in Sensex 30 pack. The company clarified that the cancellation of coal blocks by the Supreme Court is not expected to make a significant impact. Of the four coal blocks allocated, two were not in operation, one supplied to its Hirakud Smelter. According to the company, at a suggested levy of Rs295 per tonne on coal, the total one time impact on the company would be around Rs500 crore. It also said that the only incremental impact because of the cancellation of coal blocks would be on the cost of production at Hirakud smelter starting April 2015. This is not expected to be significant.

Dr Reddy Lab (2.61%) which hit its 52-week high yesterday gave up gains today and was the top loser in Sensex 30 stock.

US indices closed Thursday in the red. Except for Shanghai Composite (0.11%) and Straits Times (0.04%) all the other Asian indices closed in the red. Jakarta Composite (1.32%) was the top loser.

Japan’s annual core consumer inflation eased in August. This is another sign that the Bank of Japan could be forced into additional easing steps to meet its 2% price goal sometime next fiscal year. The core consumer prices, which include oil products but exclude fresh food, rose 3.1% in August from a year earlier.

European indices were trading in the green. US Futures too were trading higher.
In Germany, a sentiment survey released Friday showed that consumer confidence in the economy is expected to deteriorate for a second consecutive month in October. The monthly survey of GfK market research group showed consumer confidence falling to 8.3 points for October from an unrevised 8.6 points in September. Nonetheless, confidence remains "at a good level," GfK said.


Maharashtra chief minister Prithviraj Chavan resigns

BJP has demanded President's Rule in the state that is all set to elect its new government next month


Maharashtra chief minister Prithviraj Chavan has resigned from his post. On Thursday, Nationalist Congress Party had withdrawn its support from the Congress-led government. The resignation from the chief minister during the election period may lead to imposing President's Rule in the state.


Chavan sent his resignation to Maharashtra governor Vidyasagar Rao. Earlier in the day, Bharatiya Janata Party (BJP) leader and the leader of opposition in Maharashtra Assembly, Eknath Khadse met Rao seeking to impose President's Rule. According to Khadse, following the withdrawal of support from NCP, the Congress government was in minority.


NCP leader and deputy chief minister Ajit Pawar while resigning on Thursday had said that his party is withdrawing support from the government.


The Election Commission has imposed model code of conduct in Maharashtra following the notification issued on 20th September for holding assembly elections. In such a condition, the incumbent government continues in caretaker capacity but it cannot take any policy decisions. However, if President's rule is imposed then the caretaker government loses all its executive powers, say media reports.


Competition Commission orders fresh probe against Jaiprakash Associates

The CCI said it formed a 'prima facie opinion' that Jaiprakash Associates is in the dominant position in the residential market in Noida and Greater Noida and had violated fair trade norms


The Competition Commission of India (CCI) has ordered a fresh probe against Jaiprakash Associates for the company's alleged unfair business practices in imposing unreasonable conditions on buyers at one of its realty projects.


The latest investigation has been ordered by the CCI on a complaint filed by a buyer at the company's 'Kensington Park at Jaypee Greens' residential project at Noida in Uttar Pradesh.


The complaint alleged that the company was imposing certain anti-competitive clauses in its agreements for buyers.


The Commission noted that the allegations made in the complaint were similar to certain other cases against Jaiprakash Associates wherein the regulator has already ordered a probe by its Director General (DG).


CCI is presently probing Jaiprakash Associates in at least four other matters related to unfair trade practices in the real estate market.


After looking into the latest complaint, the said it formed "a prima facie opinion" that the company is in the dominant position in the residential market in Noida and Greater Noida and had violated fair trade norms.


"The Commission is of the prima facie opinion that there appears to be a case of contravention of...The (Competition) Act in the matter," CCI said in the order dated 24th September 24.


Accordingly, CCI has asked DG to investigate the matter.


The Commission has found that some of the clauses of the agreement "prima facie, appear to be unfair, one sided and loaded in favour of opposite party (Jaiprakash Associates)".


Along with Jaiprakash Associates, CCI has also ordered probe into "the role of the officials and persons who at the time of such contravention were in-charge of and responsible for the conduct of the business of the company".


While noting that there were other real estate players in the market in Noida region, the fair trade regulator said that "the land bank available with Jaypee Group is much higher than that available with any other developer".


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