Nifty, Sensex to rise but the rally may be short-lived – Wednesday closing report
Nifty may meet with a resistance between 8,400-8,440
We had mentioned in Tuesday’s closing report that NSE’s CNX Nifty and S&P BSE Sensex may put a short bounce and that if Tuesday's low holds, Nifty may rally to 8,430. The major indices in the Indian stock market ended Wednesday flat with marginal gains. This is in line with the major indices in Asian markets too.
India Vix closed at 15.88, down 0.24%. NSE turnover was at 85.73 crore.
Bargain hunting coupled with subsiding of US rate hike fears on Wednesday propelled Indian equity markets which closed in the green.
After four consecutive sessions of losses which started from July 23, the barometer S&P 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) gained over 100 points in the day's trade.
The Sensex lost over 1,040 points during the last four sessions. The main reason for the downfall emanated from the recommendations made by the special investigative team (SIT) appointed by the Supreme Court on black money.
The SIT had recommended that the participatory note, or P-Note, route of overseas funds investing in Indian stocks be stringently regulated.
Apart from P-Notes, worries over retrospective tax on capital gains, the continuing slide in Chinese markets and the proposed containment of the central bank's powers to fix key rates had also subdued the markets.
On Wednesday, the wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed in the positive territory. It was up 38 points or 0.46% at 8,375.05 points.
The S&P BSE Sensex which opened at 27,540.46 points, closed at 27,563.43 points, up 104.20 points or 0.38% from the previous day's close at 27,459.23 points.
The Sensex touched a high of 27,609.29 points and a low of 27,470.09 points in the intra-day trade.
According to market analysts, Indian exchanges remained in the positive zone due to the consistent buying ahead of the July futures and options (F&O) expiry on Thursday.
Analysts pointed out that better-than-expected corporate results from the US and hopes that US Federal Reserve will postpone interest rate hike supported markets.
The FOMC meet is significant as it will give further clues as to when the rate-hike might take place in the US. With higher interest rates in the US, the FPIs (Foreign Portfolio Investors) are expected to be led away from emerging markets such as India.
The continuous slide in the Chinese markets in the last two months has eroded nearly 40 percent of the stock value and caused panic.
More importantly, the inability of the Chinese government, fund houses and brokerage firms to arrest the fall led to global sell-offs.
Sector-wise, healthy buying was observed in capital goods, automobile, information technology (IT), healthcare and technology, entertainment and media (TECK) stocks.
However, consumer durables, fast moving consumer goods (FMCG) and oil and gas sectors came under intense selling pressure.
The BSE capital goods index zoomed by 335.50 points, the automobile index rocketed by 257.45 points, IT index augmented by 160.27 points, healthcare index was higher by 84.52 points and the TECK index was up by 81.91 points.
However, consumer durables index declined by 215.52 points, FMCG index receded by 63.96 points and oil and gas index decreased by 17.77 points.
Major Sensex gainers during Wednesday's trade were: Infosys, up 2.04% at Rs.1,085.20; Maruti Suzuki, up 1.87% at Rs.4,273.95; Lupin, up 1.83% at Rs.1,638.75; BHEL, up 1.78% at Rs.283.20; and Larsen and Toubro (L&T), up 1.75% at Rs.1,789.65.
The major Sensex losers were: ITC, down 2.35% at Rs.303.95; State Bank of India (SBI), down 2.18% at Rs.253.70, Reliance Industries, down 1.44% at Rs.995.45, NTPC, down 1.17% at Rs.135.25; and Gail, down 1.08% at Rs.348.15.
Among the Asian markets, Japan's Nikkei was down 0.13%. However, China's Shanghai Composite Index gained by 3.47% and Hong Kong's Hang Seng rose by 0.47%.
In Europe, the London FTSE 100 index was higher by 0.47%, but the French CAC 40 was marginally down by 0.11%. Germany's DAX Index, too, fell by 0.21% at the closing bell.
The top gainers and losers in the major indices in the stock market are given in the table below:
The closing values of major Asian indices are given in the table below:
Among European indices, DAX was at 11,178.01, up 0.03% and FTSE 100 was at 6,587.20, up 0.47%.