Nifty Sensex waiting for RBI’s policy action – Monday closing report

Nifty will shoot up if the RBI surprises with a rate cut. If not, the index will move sideways


We had mentioned in Friday’s closing report that as long as CNX Nifty stays above 8,550, it should rally further. Ahead of the Reserve Bank of India (RBI)’s monetary policy review, the domestic benchmarks moved sideways up to 2.00pm Monday after which they were pulled lower breaking three day’s of positive move.

S&P BSE Sensex opened at 28,748, moved in the range of 28,538 and 28,810, and closed at 28,560 (down 134 points or 0.47%). Nifty, which opened at 8,605, moved in the range of 8,545 and 8,623 and closed at 8,556 (down 32 points or 0.38%). NSE recorded a volume of 78.11 crore shares. India VIX rose 2.36% to close at 13.2025.

Economic data released after trading hours Friday showed that India's GDP eased in Q2 September 2014 over Q1 June 2014. The GDP grew 5.3% in Q2 September 2014, compared with 5.7% in Q1 June 2014. Market was waiting for the HSBC India Manufacturing Purchasing Managers' Index (PMI) for November 2014. The November HSBC manufacturing PMI for India stood at 21-month high at 53.3 compared to 51.6 in October which pushed the market for an hour or so.

Petrol prices were reduced Sunday by Rs0.91 per litre and diesel prices by Rs0.84 with effect from midnight of 30 November 2014/1 December 2014.

Price of non-subsidised cooking gas was today cut by a steep Rs113 per cylinder and that of jet fuel (ATF) by 4.1% as international oil rates slumped to multi-year lows.

Prime Minister Narendra Modi had said the centre would provide Rs28,000 crore for laying new railway lines in the northeast region of India. He also said that Centre has sanctioned Rs5,000 crore to provide 2G mobile coverage in this area for comprehensive telecom development.

Reserve Bank of India (RBI) late on Friday eased gold import norms in a bid to curb smuggling of the yellow metal. The RBI in a circular said that the government of India has decided to withdraw the 20:80 scheme and restrictions placed on import of gold. 


Gitanjali Gems (19.96%) was the top gainer in ‘A’ group on the BSE. The stock had hit its 52-week low on Friday.

Ahead of the monetary policy review, two stocks of the interest rate sensitive sector—realty, were among the top four losers in group ‘A’ on the BSE. Indiabulls Real Estate (5.25%) and Unitech (4.88%) were among the top losers.

Shares of automobile companies were in focus as auto companies start unveiling monthly sales volume data for November 2014 from today. Hero MotoCorp (3.69%) was the top gainer in Sensex 30 pack. It was also in news as it announced the launch of its six best-selling bikes in the South American country of Colombia. ONGC (3.98%) was the top loser in the Sensex 30 stock.

On Friday, US indices closed flat. Except for Nikkei 225 (0.75%), Jakarta Composite (0.28%) and NZSE 50 (0.10%) all the other Asian indices closed in the red. Hang Seng (2.58%) was the top loser.    

The HSBC China manufacturing PMI, a gauge of nationwide manufacturing activity, fell to a six-month low of 50 in November from 50.4 in October. A reading below 50 indicates a contraction in manufacturing activity from the previous month, whereas a reading above indicates expansion. China's official manufacturing Purchasing Managers Index fell to 50.3 in November compared with 50.8 in October, the National Bureau of Statistics, said today.

Global credit rating agency Moody's Investors Service on Monday cut the sovereign-debt rating on Japan to A1 from Aa3, but said the outlook is stable.

European indices were trading in the red. US Futures too were trading lower. Euro zone manufacturing growth stalled in November and new orders fell at the fastest pace in 19 months despite heavy price-cutting, a survey showed on Monday.


Vijay Mallya quits as director of Mangalore Chemicals & Fertilizers

Mangalore Chemicals and Fertilizers shares reacted favourably to the resignation on the Bombay Stock Exchange and rose 7.65% to Rs89.25


UB group chairman, Vijay Mallya has quit as a director of Mangalore Chemicals & Fertilizers (MCF). MCF has informed BSE that Mallya, a director on the board of the company, has resigned with immediate effect. Mallya was the chairman of the company.


Mangalore Chemicals and Fertilizers shares reacted favourably to the resignation on the Bombay Stock Exchange and rose 7.65% to Rs89.25.


The company has been in the middle of a takeover tussle between Deepak Fertilizers and Kolkata-based Adventz group — the latter known to be a Mallya supporter.


Under a deal signed in May 2014, UB Group Chairman Mallya was to have a considerable say in the management of MCF, even if Saroj Poddar’s Adventz group gained control of the company after its bidding war with Deepak Fertilizers.


Recently, Deepak Fertilizer’s bid to acquire 26% additional stake had failed and Mallya had retained control over the company. Currently, Deepak Fertilizers holds 32% stake in the company, Zuari 16%, UB Group 22% and the rest by public shareholders.


In terms of other woes, shares of India's grounded Kingfisher Airlines face suspension, stock exchanges have announced, hammering another nail in the coffin of the carrier founded by Mallya. The heavily indebted airline, once India's second-largest by passenger share, has never turned a profit since its launch in 2005. The company has defaulted on payments to banks, airports and leasing firms and employees, and owners of its planes have taken many of them back.


Bank unions to go on relay strike from 2-5 December

The relay strike will start on 2nd December from South Zone. On 3rd December, the strike will take place in North Zone followed by East Zone on 4th December and West zone on 5th December, the UFBU has said


United Forum of Bank Union (UFBU) and National Union of Bank Employees have called for a zone-wise relay strike between 2 to 5th December, demanding early and justifiable wage revision. Due to the relay strike, bank transactions in various parts of the country are likely to come to a standstill.


In a regulatory filing, Chennai-based Indian Overseas Bank (IOB) and Indian Bank informed that the employee unions have served notice for the strike.


As per the notice, on 2nd December, southern zone consisting states of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Telengana and Union Territories of Lakshadweep and Puducherry will see the strike. On 3rd December, strike will be held in the northern zone comprising of Chattisgarh, Haryana, Himachal Pradesh, Jammu & Kashmir, Madhya Pradesh, New Delhi, Punjab, Uttar Pradesh, Uttaranchal, Rajasthan and Union Territory of Chandigarh.


Next day, on 4th December, the relay strike will take place in eastern zone consisting Bihar, Jharkhand, Odisha, Sikkim, West Bengal, North Eastern States and Union Territory of Andaman and Nicobar Islands. On 5th December, the unions will hold strike in western zone areas consisting of Goa, Gujarat, Maharashtra and Union Territory of Daman and Diu.


Indian Bank has informed that if the strike materialises, a section of the Bank's employees may take part in the proposed strike on the said dates, in which case, the normal functioning of the branches and offices of the Bank may get affected.


According to CH Venkatachalam, general secretary, All India Bank Employees Association (AIBEA), about 23,000 branches in south zone would be affected on 2nd December.


Last month, during the one day strike called by around eight crore cheque worth Rs5.60 lakh crore could not be cleared on 12th November, Mr Venkatachalam added.


Public sector bank employees have been calling for a wage revision from November 2012 and various talks with the Indian Banks' Association (IBA) were not successful even though the Unions have been conducting strikes over the years.


The UFBU is an umbrella organisation comprising of nine bank staff unions. According to earlier reports, there are 27 public sector banks in the country.


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