Nifty will head higher as long as it does not close below 8,405
In Thursday’s closing report, we had mentioned that the NSE’s CNX Nifty will head higher subject to dips caused by global sell-offs. The weak opening on Friday was followed by a volatile up move. The Indian benchmarks touched a higher high and closed in the green.
S&P BSE Sensex opened at 28,057 while Nifty opened at 8,504. Both Sensex and Nifty then fell sharply hitting the day’s low at the beginning of the session at 27,945 and 8,452, respectively. However, both moved higher later in the day to the level of 28,176 and 8,531. Sensex closed at 28,122 (up 46 points or 0.17%) while Nifty closed at 8,514 (up 20 points or 0.23%). NSE recorded a volume of 95.43 crore shares. India VIX rose 6.90% to close at 17.2750.
Data announced after market hours Thursday showed that India's merchandise export declined 3.8% to $25.4 billion in December 2014 over same month last year. Meanwhile, merchandise imports also declined 4.8% to $ 34.83 billion in December 2014 over December 2013. Thus, the trade deficit narrowed to 10-month low of $ 9.4 billion in December 2014, while nearly halving from US$ 16.86 billion in November 2014.
The Ministry of Commerce & Industry today claimed that some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs75,000 crore over the next 2-3 years.
The SBI Composite Index, an indicator for tracking India's manufacturing activity, registered declining month-on-month momentum. The monthly index has slipped from 55.4 (high growth) in December 2014 to 51.5 (low growth) in January 2015. On a year-on-year basis however, the index inched up to 52.1 in January (signalling moderate growth) from 50.6 (low growth) in December 2014.
As per the practice of revising rates every fortnight, state fuel retailers were expected to announce a cut in petrol and diesel prices Thursday as global rates had fallen by about 4%. However, they skipped the revision. Petroleum Minister Dharmendra Pradhan said the state-owned firms will do what is "appropriate". In fact, the government on Friday raised the excise duty on petrol and diesel by Rs2 per litre.
Sun TV Network (11.32%) was the top gainer in ‘A’ group on the BSE following the exit of promoters from lossmaking SpiceJet. Its December 2014 shareholding pattern showed increase in FII holding from 16.84% (in September 2014 quarter) to 17.94% while DII holding fell from 1.92% to 1.52% and retail shareholding fell from 6.24% to 5.54%.
Jet Airways (4.02%) was among the top three losers in ‘A’ group on the BSE. It recently clarified that that reports saying that Naresh Goyal (the airline’s promoter and chairman) has pledged 51% shares held by him in Jet Airways to Punjab National Bank is factually inaccurate and incorrect. Jet Airways stated that the undertaking given to PNB implies that the airline’s promoter and chairman will not dilute his equity, by way of a sale, below 51% at any time, and will continue to be the majority shareholder in the airline. It is thus, an undertaking of non-disposal of any further equity and not a matter of pledging of his shares.
Sun Pharma (2.88%) was the top gainer while Hindalco (2.40%) continued to be the top loser in the Sensex 30 pack.
US indices closed Thursday in the red. Americans unexpectedly filed applications for unemployment benefits last week, indicating companies let go of seasonal workers following the holidays. Jobless claims climbed by 19,000 to 316,000 in the week ended 10 January 2015, the most since early September, from a revised 297,000 in the prior period, a Labor Department report showed.
Except for Shanghai Composite (1.20%) all the other Asian indices closed in the red. Nikkei 225 (1.43%) was the top loser.
China's foreign direct investment (FDI) rose an annual 1.7% last year. China attracted a record $119.56 billion from foreign investors last year compared to $117.6 billion in 2013, the Ministry of Commerce said in a statement.
European indices were trading higher while US Futures were trading in the red. Switzerland's central bank yesterday, 15 January 2015, scrapped its policy of capping the Swiss franc at 1.20 to the euro. The Swiss National Bank has intervened in markets since September 2011.
The latest data showed that inflation in Germany weakened in December, confirming its preliminary estimates for the previous month. The annual rate of inflation in Germany, measured according to common European Union standards, was 0.1% in December, while prices also rose 0.1% on the month, the Federal Statistics Office said, confirming its preliminary figures published earlier this month.
Swiss National Bank yesterday dumped its long-standing minimum exchange rate of 1.20 Swiss francs to the euro, as the cap on the franc appeared increasingly indefensible in the face of the weakening euro. This has created shockwaves across Europe and US causing higher volatility and currency losses.