If Nifty holds Wednesday’s lows, it may rally till 7,970
We had mentioned in Tuesday’s closing report that NSE’s CNX Nifty and S&P BSE Sensex may head higher however, there could be plenty of intraday volatility. On Wednesday, benchmarks in the Indian stock market were unable to sustain Tuesday’s recovery after the crash on Monday. The market fell again on Wednesday by over 1% and the bulls have beaten a retreat.
Weakness in the Chinese market, despite an interest rate cut, weakness in the US markets on Tuesday and the upcoming derivatives expiry led to the 30-stock Sensex, shedding 318 points on Wednesday. Sensex opened at 26,063.27 points, closed at 25,714.66 points -- down 1.22% from its previous close at 26,032.38 points. The Sensex touched a high of 26,156.61 points and a low of 25,657.56 points during intra-day trade. The broader 50-scrip Nifty too closed lower at 7,791.85 points, with losses of 88.85 points, or 1.13%.
What worried the market participants is the China’s interest rate cut administered by the People's Bank of China (PBOC) inter-policy decision on Tuesday. The move looked desperate. It might have propped-up the currency markets a bit, but its impact on yuan and thereafter the Indian rupee can be counter-productive.
The yuan has fallen by 4.6% till now since 11th August.
The rate easing in China coupled-with a stalled domestic reforms process has greatly damaged the investors’ morale in the Indian markets.
Sector-wise, out of the 12 BSE sub-indices, only power and metal managed to remain in the green.
The S&P BSE banking index plunged by 331.35 points, the healthcare index plummet by 198.20 points, capital goods index receded by 147.88 points, the automobile index declined by 124.04 points and the information technology (IT) index fell by 105.14 points.
On the other hand, the S&P BSE power index gained by 29.54 points and metal index was up 16.37 points.
Major Sensex gainers in Wednesday's trade were: BHEL, up 3.45% at Rs.240.20; Tata Motors, up 2.31% at Rs.336.80; Bajaj Auto, up 1.79% at Rs.2,244.15; Wipro, up 1.46% at Rs.549.75; and Coal India, up 1.22% at Rs.358.20.
The major Sensex losers were: HDFC, down 3.77% at Rs.1,102.45; Hero MotoCorp, down 3.45% at Rs.2,391.95; Mahindra and Mahindra, down 3.07% at Rs.1,215.30; State Bank of India (SBI), down 3% at Rs.245.80; and Bharti Airtel, down 2.57% at Rs.339.75.
The top gainers and top losers in the major indices are given in the table below:
Among the Asian markets, Japan's Nikkei gained by 3.20%. However, China's Shanghai Composite Index lost 1.30% and Hong Kong's Hang Seng dropped by 1.52%.
The closing values of the major Asian indices are given below:
European markets opened sharply lower but have managed to recover all their losses.