Nifty, Sensex move hinges on Delhi elections – Weekly closing report

If BJP loses, it will be an excuse for punters to sell, if not, there could be a short rally


The S&P BSE Sensex closed the week that ended on 6th February at 28,718 (down 465 points or 1.59%), while the NSE’s CNX Nifty ended at 8,661 (down 148 points or 1.68%). Previous week, we mentioned that Nifty may be trapped in a range of 8,600-8,900.

On Monday, the flat opening on the Nifty was followed by the index trading in the red for most of the session. Nifty closed at 8,797 (down 12 points or 0.13%). India fiscal deficit reached 100.2% of Budget Estimate in nine months ended December 2014 to Rs5.32 lakh crore.

In January, India’s manufacturing activities expanded at a three-month-low pace, as orders moderated. The HSBC PMI declined to 52.9 points in January, compared with 54.5 in December.

On Tuesday, the Reserve Bank of India (RBI) in its sixth bi-monthly monetary review announced reduction in the statutory liquidity ratio (SLR), while keeping other key rates unchanged. Nifty closed Tuesday at 8,757 (down 41 points or 0.46%).


Eight core industries comprise nearly 38% of the weight of items included in the Index of Industrial Production (IIP). The combined index of Eight Core Industries stands at 172.7 in December 2014, which was 2.4% higher compared to the index of December 2013. Its cumulative growth during April to December, 2014-15 was 4.4%.


Domestic oil marketing companies (OMCs) on Tuesday slashed petrol prices by Rs2.42 a litre and diesel price by Rs2.25 a litre in line with the decline in global oil prices.


Wednesday was the fourth consecutive session of Nifty closing lower. Nifty closed at 8,724 (down 33 points or 0.38%). The HSBC India Services PMI Business Activity Index edged up to 52.4 in January 2015, from 51.1 in December 2014. According to survey responses, the latest increase in the services activity reflected further growth of new business during the month.


Pessimism on the Nifty continued on Thursday. During the afternoon session, the 50-share index shot up for a while but met with severe selling in the last 45 minutes and hit a lower low before closing near the same level. Nifty closed at 8,712 (down 12 points or 0.14%).


The stance of European Central Bank (ECB) standoff between the Greek government and its international creditors by declaring it would stop accepting Greek bonds as collateral for central bank loans added to the negativism on the bourses. The market was also nervous ahead of Delhi elections, which seemed to be a close race between Bharatiya Janata Party (BJP) and Aam Admi Party (AAP).


RBI on Thursday allowed Foreign Portfolio Investors (FPIs) to invest their coupons received on investments in government securities back into such bonds. These investments would be allowed even after the FPIs having fully utilised the applicable limits of $ 30 billion.


On Friday, Nifty witnessed a volatile session in the red. Nifty closed at 8,661 (down 51 points or 0.58%). Ahead of US jobs report, which could provide cues on the US economic recovery, performance of the global counterparts looked mixed. Disappointing German industrial production data and concerns over Greece's future continued to affect market sentiments adversely.


Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:



Modi may use military option if terror attack traced to Pakistan, says Blackwill
According to Robert Blackwill, former US Ambassador to India, PM Modi will be much more likely to use military force if there is a major terrorist attack whose breadcrumbs lead to Pakistan and the Pakistani military and ISI
Prime Minister Narendra Modi is likely to use the military option if the next terrorist attack in India is traced back to Pakistan, says Robert Blackwill, former US Ambassador to India. He, however, expressed hope that the Pakistanis would understand that their past behaviour is unlikely to be tolerated now.
“Every Indian Prime Minister since the attack on the Parliament in Delhi now heading on 15 years ago has looked seriously at a military response when these incidents occur and has stepped back. But I believe that sentiment inside India has changed substantially and I think this Prime Minister is unlikely to step back,” Blackwill said.
“If there is a major terrorist attack whose breadcrumbs lead to Pakistan and the Pakistan military and ISI, I think that this Prime Minister is likely to use military force against Pakistan territory. It’s not a certainty,” Blackwill told reporters during a conference call organised by the Council on Foreign Relations (CFR), a top American think-tank.
Blackwill, who is a close watcher of India and South Asia, said Modi’s predecessors have been briefed by the Indian military on options and have never found them attractive.
“But I think Modi, both as a personality and reflecting Indian public opinion and political sentiment across the society will be much more likely to use military force than his predecessors,” he said.
“Now how that might be applied is another matter. To try to diminish the likelihood of escalation between two nuclear weapon states, but hopefully the Pakistanis understand that their behaviour in the past is unlikely to be tolerable to this Indian Prime Minister,” Blackwill said in response to a question.
Stephen Cohen, senior fellow in foreign policy at the Brookings Institute, agreed that Prime Minister Modi’s response to a terrorist attack emanating from Pakistan would be a different one than that of his predecessor.
“I think based on what he (Modi) said and I think based on the Indian public sentiment, if there was another Mumbai attack, which I don’t think it’s going to be that likely, it (India’s response) may be something quite different. There will be a vigorous Indian response. Perhaps even direct attacks on Pakistani territory, hitting camps,” Cohen said.




2 years ago

the recent attack by both sides should be sufficient evidence for every one to know any terror attack from Pakistan will be disastrous for both sides. Indian patience because of Pakistan continuous attempt to bleed Indian security forces is thin and evaporating. It will be difficult to imagine what will happen in such circumstances.

Centre promises all support to develop Mumbai as a Global Financial Hub

According to Venkaiah Naidu, providing basic infrastructure is the main challenge and the government's focus should be on drinking water, sanitation, solid waste management, affordable housing, slum redevelopment and a good public transport


Promising the wholehearted support of the Indian government to develop Mumbai as a Global Financial Hub, Venkaiah Naidu, the union Urban Development Minister, Friday asked the Devendra Fadnavis Government to focus on 'Basics First'.  
Speaking at the valedictory function of the Mumbai Next Summit, Naidu said, "Urbanisation is a reality. We have the main challenge of providing basic infrastructure for the people in urban areas. The focus should be on drinking water, sanitation, solid waste management, affordable housing, slum redevelopment and a good public transport."  
He said the Ministry of Urban Development will extend all support to the Government of Maharashtra in all the areas listed above. 
The Minister said public transport needs to be strengthened on priority. "More cars on the streets may be a symbol of prosperity, but it creates great congestion."  
He said Mumbai had many firsts to its credit including the first bus service and the first suburban train service, but observed that today its local train service was under great strain.  "The city has only 11kms of Metro corridor, as compared to 120kms in Delhi, where another 150kms are being added," said Naidu.
Maharashtra Chief Minister Devendra Fadnavis gave details of reform measures initiated by his government and stressed on making Maharashtra an easier destination to do business.  He said the coastal road project and the Mumbai Trans-Harbour Link would be completed over the next two-three years.  
The Urban Development Minister stressed on simplification of approvals and said there should be no 'man-to-man contact' as it tends to breed corruption. "All the processes should be made online and third party inspection should be mandatory," he said.  
However, the Minister added that overnight miracles cannot be expected as India was a democracy and everyone had to be taken along "It is a step by step process" he said. 
Naidu asserted that the investment climate in the country had improved for the businessmen and inflation had come down bringing cheer to the common man. Defending his government's resolve of creating a pro-business environment in the country, Naidu said "some people call us 'pro-business'. What is wrong in being pro-business?  It is the businessmen who create wealth in the country, and if no wealth is created, what will you distribute under welfare programmes?" 
The Minister called for greater participation of private sector in infrastructure development programme of the country. He said public-private partnership - PPP is the only sustainable model to go ahead.
Earlier, Union Minister of State for Finance, Jayant Sinha said financial services, being high value sector can be a leader in wealth creation.  He said, since Mumbai accounted for 50-60% of market capitalization it was best suited to become the Global Financial Hub. "There are certain regulatory and taxation issues which need to be addressed and there is no reason to doubt why BKC cannot become the next Canary Wharf," he added.


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