Nifty will head higher, if it stays above 7,700
We had mentioned in last week’s closing report that Nifty, Sensex were in no-man’s land and that the absence of any trigger – positive or negative – would keep Nifty drifting sideways. A favourable monsoon forecast sent India's benchmark equity indices soaring this week. The trends of major indices in the course of the week’s trading are given in the table below:
On Monday, the key indices of the Indian stock markets opened on a firm note, on the back of a rebound in global crude oil prices and positive Chinese markets. Recovery after last week's correction lifted prices and the major indices closed in the green. The BSE market breadth was tilted in favour of bulls -- with 1,471 advances and 1,113 declines.
On Monday, Finance Minister Jaitley said that the steel sector had started turning around as a result of the government measures to protect domestic supplies from imported cheap Chinese steel. "The steel sector was suffering from the cheap Chinese steel coming in at below cost prices so we raised the custom duty, imposed safeguard duty and we also imposed the minimum import price."
Upcoming quarterly results, along with global and domestic macro-economic data, were expected to guide the Indian equity markets during the week. Market observers had pointed out on Monday that investors' sentiments would be heavily influenced by foreign funds inflow, global crude oil prices and the rupee's movements.
On Tuesday, optimism in the Indian stock markets continued with the major indices making small gains over Monday’s close. The latest news to attract optimistic investors was the forecast for a favourable monsoon from the Indian Meteorological Department.
Ahead of the release of data on factory output and retail inflation, key Indian benchmark indices were trading higher on Tuesday. At the BSE, good buying was observed in auto, industrials and oil and gas sectors, while selling pressure was seen in metal sector; 26 shares were up and four were down -- three of them from the pharmaceuticals sector. Asian markets showed a somewhat mixed trend with Japanese benchmarks up and those in China trading lower.
The Coal India board approved “giving up of performance incentive for supply of higher grades of coal (G5 and above) in the Model Fuel Supply Agreement for power and non-power with immediate effect and to improve lifting of coal," the company said in regulatory filing to BSE. The miner said this decision was taken due to fall in international coal prices and improved supply by it. There is sluggishness in coal demand in general and higher grade of coal in particular, the company said. CIL shares closed at Rs274.45, down 2.28% on the BSE.
Bharti Airtel's recent acquisition of Aircel's 4G airwaves in eight circles for Rs3,500 crore through a spectrum trading deal was credit-positive, rating agency Moody's Investors Service report said on Tuesday. The company has rolled out 4G services in a total of 427 cities across 14 circles already, as it had secured a pan-India data enablement in the 2010, 2014 and 2015 auctions, through a combination of the 900Mhz, 1800Mhz and 2300Mhz bands. Bharti Airtel shares closed at Rs349.55, up 0.34% on the BSE.
Key Indian stock market indices soared on Wednesday morning, cheered by the official forecast that rains this monsoon season will be bountiful, as also on account of a rise in factory output after three months of contraction and a notable fall in retail inflation. Among the 30 Sensex stocks, the sole scrip that was in the red was GAIL India. This scrip was down at the NSE as well, along with Tata Consultancy Services. Significantly, each of the 19 sector-specific indices of the BSE was also ruling higher. The BSE market breadth was in favour of the bulls -- with 1,566 advances and 1,120 declines.
The India Meteorological Department (IMD) said that after two straight years of drought, India was likely to be showered with above-average rains during the upcoming monsoon season, with a probability of more than 94% precipitation. Then, after the closing bell, came the twin dose of positive news from the Central Statistics Office that India's factory output for February logged a growth of 2% after three straight months of decline, and annual retail inflation fell to 4.83% in March from 5.26% in February.
It was reported on Wednesday that the Supreme Court would examine if the Reserve Bank of India and the central government could take shelter behind the confidentiality clause in the RBI Act and other statutes for holding back names of loan defaulters and the total quantum of money in default. If bank recoveries of bad loans were to improve, the Bank Nifty could improve further.
Idea Cellular emerged as the biggest gainer of the mobile number portability (MNP) scheme in the last five years, Kotak Institutional Equities said on Wednesday in a five-year scorecard. Idea Cellular shares closed at Rs114.45, up 0.88% on the BSE.
Investors were headed for a long weekend with trading holidays on Thursday and Friday. Next week will be a busy one with a flurry of March quarter results due to be announced. Infosys is expected to be the first bluechip firm to come out with its results on April 15.