Nifty needs some strongly positive news to rally higher and sustain it
Out of the past three trading session, the NSE’s CNX Nifty managed to reach two new life time highs but the moves were weak. We had been mentioning for the past week that the index is struggling to move higher and is most likely to give up gains. Today the index closed in the red.
The S&P BSE Sensex opened at 28,049 and was followed by a range bound session for little while when it hit its intra-day high at 28,099. Nifty opened at 8,405 and hit its high almost at the same level. Immediately, the indices plunged in to the negative.
Efforts to revive did not succeed. Sensex hit a low at 27,823 and closed at 27,941 (down 68 points or 0.24%), while Nifty hit a low at 8,320 and closed at 8,358 (down 25 points or 0.30%). The NSE recorded a volume of 97.76 crore shares. India VIX fell 4.40% to 13.8000.
The government will unveil WPI inflation data for October 2014 on Friday.
The government has raised the excise duty on petrol and diesel by Rs1.50 a litre to mop up additional revenue of about Rs13,000 crore.
Reports, quoting Minister of State for Commerce and Industry, Nirmala Sitharaman said that India and the US have resolved their differences on public stockholding of food and this opens the way for implementation of the WTO trade facilitation deal.
Coming back to markets, Amtek Auto (8.67%) was the top two gainers in ‘A’ group on the BSE. It has been reported that it has plans to diversify into new areas such as aerospace, railways and oil and gas by utilising its core forging and casting business.
Bajaj Electricals (11.53%) was the top loser in ‘A’ group on the BSE. It posted weak September 2014 quarter result which pulled it lower today.
Infosys (1.77%) was the top gainer in Sensex 30 pack. the stock hit its 52-week high today. Infosys is apparently in the race to acquire CIMPA, the engineering services unit of Airbus. However, the company clarified on BSE that such news is a speculative one.
Sesa Sterlite (2.50%) was the top loser in Sensex-30 stock. It announced that it would invest $782 million over a three-year period in southern Africa to tap the region's large undeveloped deposits of the metal. The amount will be used to develop an open pit zinc mine in Gamsberg, South Africa, as well as the conversion of the Skorpion Zinc refinery in neighbouring Namibia.
US indices closed Wednesday flat.
Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said on Wednesday financial markets could face less than placid waters in coming years. In his formal remarks, Mr Kocherlakota repeated his belief that a US central bank rate increase next year would be a mistake. Inflation is unlikely to reach the Fed’s 2% target until 2018, and because of this outlook, “it would be inappropriate for the [Federal Open Market Committee] to raise the target range for the fed funds rate at any such meeting” occurring in 2015, he said.
Asian indices showed mixed performance. Nikkei 225 (1.14%) was the top gainer while NZSE 50 (0.46%) was the top loser.
China's industrial output growth in October unexpectedly dropped, reflecting the continued headwinds faced by the Chinese economy, official data showed today.
Value-added industrial output in China rose 7.7% in October from a year earlier, slowing from an 8% on-year increase in September, the National Bureau of Statistics said.
Industrial production increased 0.52% in October from September. In September, it had climbed 0.91% from the preceding month.
China's retail sales rose 11.5% in October from a year earlier, slowing slightly from an 11.6% on-year increase in September. Retail sales increased 0.98% in October from September. In September, retail sales had risen 0.86% from the preceding month.
European indices were trading in the green. US Futures too were trading higher.
Germany's inflation rate was confirmed flat at 0.7% in October.
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Only a strong event or news can drive the market significantly higher
In line with what we mentioned in Tuesday’s closing report, the Indian indices opened higher and broke the previous lifetime high it hit on Monday. However, lower volumes supported the rise today on the Nifty. The surge in the morning session to the new lifetime high was followed by a gradual move down. However, the benchmark indices managed closing in the green.
S&P BSE Sensex opened at 27,959 and moved from a high of 28,126 to a low of 27,959 and closed near the day’s low at 28,009 (up 99 points or 0.35%). NSE’s CNX Nifty opened at 8,379 and hit a high of 8,415, and moved lower to the level of 8,371 finally closing at 8,383 (up 21 points or 0.25%). NSE recorded a lower volume of 92.07 crore shares. India VIX fell 2.47% to close at 14.4350.
The government unveiled industrial production data for September 2014 today. IIP growth for September 2014 was at 2.5%, compared to 0.4% recorded in the month of August. September IIP was above estimates.
The CPI (consumer price index) inflation stood at 5.52% in the month of October as compared to 6.46% reported in the month of September.
The empowered committee of state finance ministers on goods & services tax (GST) at its meeting held on Tuesday reportedly agreed on the 'place of supply' rules that form the backbone of the proposed GST.
The Petroleum Ministry, in a notification, relaxed rigid timelines prescribed in the production sharing contract (PSC) for development and production of oil and gas.
Bayer CropScience (10.35%) was the top gainer in the ‘A’ group on BSE. The stock hit its 52-week high today. After market hours on Tuesday, the company came out with its September 2014 quarter results. It posted a net profit of Rs 176.10 crore for the September 2014 quarter, compared to Rs 116.50 crore for the September 2013 quarter.
Sales increased from Rs 1,050.40 crore to Rs 1,241.00 crore for the relevant period.
Hindustan Construction (4.49%) was the top loser in the ‘A’ group on BSE. It informed BSE that Lavasa Corporation Limited, its subsidiary, received observation letter from SEBI for its proposed initial public offering of equity shares, for an amount not exceeding Rs 750 crore.
Axis Bank (3.02%) was the top gainer in the Sensex 30 pack. It hit its 52-week high today. Cipla (3.06%) was the top loser among the Sensex 30 stocks.
US indices closed in the positive on Tuesday. The National Federation of Independent Business said that its small-business optimism index rose 0.8 points to 96.1 in October, a two-month high.
Philadelphia Fed's President, Charles Plosser, today said US interest rates should be raised "sooner rather than later." In a speech in London, Plosser said rising rates are not inconsistent with a continuing recovery.
Asian indices showed a mixed performance. Shanghai Composite (1%) was the top gainer while Taiwan Weighted (1.28%) was the top loser.
There is a growing anticipation that Japananese Prime Minister Shinzo Abe will postpone a planned sales tax hike to avoid damaging a fragile recovery.
European indices were trading in the red. US Futures too were trading lower.