Stocks
Nifty, Sensex may try to bounce back – Weekly closing report

The indices will move sideways for some time 

 

The S&P BSE Sensex closed the week that ended on 12th December at 27,351 (down 1107 points or 3.89%), while the NSE's CNX Nifty ended at 8,224 (down 314 points or 3.68%). From here, the indices will move sideways for some time. At the end of the previous week, we had mentioned that as long as Nifty continues to remain above 8,500, the rally may continue.
 
On Monday, Nifty had a weak opening followed by a gradual downwards move, closing in the red for a second consecutive session. Nifty closed at 8,438 (down 100 points or 1.17%). The loss on the index was the highest since 16 October 2014. Weak data from Asian markets affected market sentiments. 
 
Japan's revised third-quarter gross domestic product showed the economy shrank more than initially estimated, with growth contracting an annualised 1.9%.  Chinese exports rose just 4.7% on year, compared to October's 11.6% rise. Imports sank 6.7% in November against a 4.6% rise in October.
 
As anticipated on Monday, the weakness on the index continued on Tuesday making the Nifty close near the day’s low. Nifty closed at 8,341 (down 98 points or 1.16%). Finance Minister Arun Jaitley was quoted as saying that there is no cause for concern about the forex reserves and they are at a comfortable level. He also mentioned that the excise duty hike on November 12 and December 2 will fetch the exchequer Rs6,000 crore and Rs4,500 crore respectively in the remaining months of FY2014-15.
 
Market bounced back a bit on Wednesday on the back of positive news. Nifty closed at 8,356 (up 15 points or 0.18%). There were reports that the Parliamentary Select Committee cleared the government's proposal of a composite cap of 49% on foreign investment in the insurance sector. The Appellate Body of the World Trade Organization also ruled against the US imposing high duty on imports of certain Indian steel products.
 
The downtrend on the Nifty resumed on Thursday with the index hitting its lowest since 31 October 2014 and closing in the negative. Nifty closed at 8,293 (down 63 points or 0.75%).
 
The Union Cabinet chaired by the Prime Minister, Narendra Modi, on Wednesday, gave its approval for allowing public sector banks to raise capital to meet their additional capital requirements under BASEL-III by diluting Government holding upto 52% in a phased manner.
 
Weakness in European indices pulled Nifty further lower on Friday. Nifty although opened in the green subsequently moved lower and closed at 8,224 (down 69 points or 0.83%).
 
The government's total indirect tax collections jumped 19.4% to Rs44,060 crore in November 2014 over November 2013, according to provisional figures released by the finance ministry on Thursday.
 
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:
 

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Nifty, Sensex may remain under pressure due to weakness in foreign markets– Friday closing report

Nifty has to close above 8,280 for a short rally

 

Today, CNX Nifty managed opening higher and managed staying in the green up to around 11.15am. However it made a gradual move in the red after that and its effort to revive was followed by it being pulled further lower.
 
S&P BSE Sensex opened at 27,599 and soon hit a high at 27,692 while Nifty opened at 8,302 and hit a high at 8,322. The indices moved lower to hit a low at 27,320 and 8,216. Sensex closed at 27,351 (down 251 points or 0.91%) while Nifty closed at 8,224 (down 69 points or 0.83%). NSE recorded a volume of 76.81 crore shares. India VIX rose 7.67% to close at 13.7525.
 
The government will release the data on CPI inflation for November 2014 and industrial production data for October 2014 after trading hours today.
 
Prime Minister's Office yesterday said that India's ambitious economic growth strategy would require a significant enhancement of power generating capacity. India and Russia have decided to fast-track the implementation of agreed cooperation projects between the two countries for nuclear power plants.
 
Minister of Chemicals and Fertilizers, Ananth Kumar on Thursday said that the government will clear fertilizer subsidy arrears within a month.
 
The government's total indirect tax collections jumped 19.4% to Rs44,060 crore in November 2014 over November 2013, according to provisional figures released by the finance ministry on Thursday. Total indirect tax collections rose 7.1% to Rs3,28,662 crore during the period April-November 2014 over the corresponding previous year period. This amounts to an achievement of 52.7% of the target fixed at Rs6,23,244 crore in the Union Budget 2014-15 for the current fiscal year.
 
The Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said that the central bank will start talks with the government for an appropriate timeline to ensure that the economy is within a medium term inflation target of 2% to 6%.
 
Maruti Suzuki (1.30%) was the top gainer in Sensex 30 pack. Recently, there were reports which mentioned that it has received 4,141 gypsy vehicles from the Indian Army. BSE has asked for clarification from the company for which a reply is still awaited.
 
GAIL (4.63%) was the top loser in the Sensex 30 stock. Uttar Pradesh government has agreed to constitute a high power committee to provide single window clearance for construction of Jagdishpur-Haldia gas pipeline. The setting up of the panel will give a "boost to the speedy implementation" of the pipeline that originates in Uttar Pradesh and ends in West Bengal, the company said in a statement.
 
On Thursday, US indices closed in the green. US retail sales rose 0.7% in November from the previous month. Applications for unemployment insurance benefits declined by 3,000 last week to 2,94,000, the claims have been below 3,00,000 for 12 of the past 13 weeks.
 
Except for Hang Seng (0.27%) and KLSE Composite (0.66%), all the other Asian indices closed in the green. Nikkei 225 (0.66%) was the top gainer.
 
Chinese economic data for November released today showed better-than-expected retail sales and weaker-than-expected industrial output. Industrial production rose 7.2% on year in November, below October's 7.7 % rise. Meanwhile, retail sales rose 11.7% on year, up from October's 11.5% rise.
 
European indices and US Futures were trading deeply in the red.
 
Germany's wholesale price index fell unexpectedly last month, today's official data showed. In a report, Destatis said that Germany's wholesale price index fell to minus 0.7% in November, from minus 0.6% in the preceding month.
 

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No proposal to ban P-Notes

P-Notes, or offshore derivative instruments, are mostly used by overseas HNIs, hedge funds and other foreign institutions to invest in Indian markets

 

The government said that it does not propose to ban Participatory Notes (P-Notes), as part of its policy to check inflow of black money.
 
“There is no proposal at present to remove participatory notes in order to check the generation and laundering of black money,” Minister of State for Finance Jayant Sinha said in a written reply in the Lok Sabha.
 
P-Notes, or offshore derivative instruments, are mostly used by overseas HNIs, hedge funds and other foreign institutions. This is done when they invest in Indian markets through registered foreign institutional investors (FIIs). It saves on time and costs which are associated with direct registrations.
 
In a separate reply, Sinha said the total net investments in equity and debt made by FIIs and Foreign Portfolio Investor (FPI) in India between April-November stood at over Rs1.84 lakh crore.
 
The total investment by FIIs and FPIs in 2013-14 was Rs51,649 crore.
 
The FPI regime has classified foreign investors into three groups based on their risk profile. This will eventually replace existing categories such as FIIs, their sub-accounts and qualified foreign investors.
 

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