Chances of a rally will be bright if the Nifty closes above 7,600
We had mentioned that Nifty, Sensex were on track for more gains as long it closes above 7,600. Unfortunately, the market failed to close above 7,600 and was whacked at the open by a huge decline in US markets and Asia. Amidst thin volumes of trading, the major indices in the Indian stock markets fought back and closed the day with small losses. The trends of the major indices during the course of Thursday’s trading are given in the table below:
Diminishing hopes of an interest rate cut, coupled with caution over the third quarter results and thin volumes depressed the Indian equity markets during a volatile late-afternoon trade session on Thursday. The bellwether indices' receded after making healthy gains as key macro-data showed acceleration in inflation trends. The rise in wholesale price index (WPI) diminished hopes of a rate cut by the country's apex bank and subdued investors' sentiments. Caution over the third quarter (Q3) results season, long-liquidation positions and sliding Asian markets, too, dented sentiments. Initially, the bellwether indices opened deep in the red, following lower closing of the US markets on Wednesday and a further plunge in oil prices. However, both indices pared their initial losses as healthy Q3 results, recovering European markets and short-covering restored investors' risk-taking appetite. Value buying at lower levels, which was prompted by attractive prices, supported the markets' upward movement.
Contrary to market trends, the government sector bank SBI (State Bank of India) is moving into wealth management for its customers. The SBI on Thursday formally launched its first exclusive start-up bank branch SBI InCube and wealth management services SBI Exclusif. "Introducing wealth management has been one of the bank's top strategic priorities, as we have a number of High Net worth Individuals (HNI)," the bank's chairman Arundhati Bhattacharya said. SBI Exclusif will offer a dedicated relationship manager who will take care of all the banking and investment needs of its clientele. "We believe that India today is an aspirational nation, there are a lot of people who are moving up the curve and they are too busy today to actually worry about looking after their wealth as well as wealth creation and generation and maintenance, so we hope to be able to do this job for such people," said Bhattacharya. SBI Exclusif will be served by well experienced relationship managers and investment experts who have undergone extensive training with leading global institutions. The new wealth management offering from the SBI will provide e-Wealth Center which can deliver relationship management services remotely for extended hours and enable customers to transact and invest on digital channels like internet and mobile. Other SBI Exclusif benefits include a special wellness benefit card, top tier credit and debit cards, tax and legacy planning services and cash pickup/delivery services among others. "Many start-ups get funding from abroad but they do not know what are the formalities, they need to do before they can get this funding and utilise it. So we hope to be able to guide them in all of these matters," she said. Run by an assistant general manager (AGM) and a team of three officers, InCube offerings also include a help desk and salary accounts. It will also maintain an e-mail addresses database of start-ups to send a monthly newsletter. SBI shares closed at Rs195.80, down 2.56% on the BSE.
A proposal from drugmaker, Cadila to inject foreign equity of Rs5,000 crore towards expansion in India is among the five proposals approved by the Foreign Investment Promotion Board (FIPB) in its latest meeting, an official statement said on Thursday. Another proposal, again from a global pharmaceuticals company, that was approved is from Sweden-based Recipharm Participation for incorporating a subsidiary in India with an investment of Rs1,050 crore for investing in other companies, the statement added. In October last year, Recipharm had announced that it was entering into an agreement to acquire 74% majority stake in Nitin Lifesciences, an Indian contract manufacturing firm in the sterile injectables business, for Rs671 crore. Almost all the other proposals in areas ranging from financial services to cement did not involve any foreign equity infusion. Cadila Healthcare shares closed at Rs315.40, down 1.41% on the BSE.
With food items, notably pulses and onions, continuing to remain dear, India's annual wholesale inflation rate moved up further to (-)0.73% for December, against (-)1.99% for the month before, official data showed on Thursday. This was the fourth straight month of increase in the annual inflation. As per the wholesale price index numbers released by the Ministry of Commerce and Industry, the annual food inflation was steep at 8.17%, while index numbers for fuels and manufactured products were both in the negative -- at (-)9.15% and (-)1.36%, respectively.
In the past month, the index for food articles, that is unprocessed items, rose 0.6 percent while the build-up in the first three quarters of the fiscal was 9.39%. For food products, the rise was 0.3% in the past month under review, and 3.12% since April 2015. India's overall retail prices too have been rising. According to the data released two days ago, the annual retail inflation moved up further to 5.61% in December from 5.41% during the month before. The consumer price index numbers also showed that food inflation rose higher -- to 6.4% as against 6.07% in the month before. In rural and urban areas, the annual inflation rates for food items were 6.41% and 6.31%, respectively. As per Thursday's data on wholesale prices, the annual inflation for pulses in general was 55.56%, while for onions it was 25.98%. But with potatoes cheaper by 34.99% over the past year, the annual rise in the overall vegetable index stood moderated to 20.56%.
Buoyed by better than expected results and riding on a strong dollar, global software major Infosys Ltd. on Thursday marginally revised its annual guidance for the fiscal 2015-16 in constant currency and on the latest exchange rate. In a regulatory filing with the Bombay Stock Exchange (BSE), the city-based IT bellwether said its consolidated revenue in rupee terms would be 12.8%-13.2% in constant currency and 16.2%-16.6% on December 31 exchange rate when the US dollar was Rs66.16. Under the International Financial Reporting Standard (IFRS), the outsourcing major increased the annual guidance to 12.8%-13.2% in constant currency and 8.9%-9.3% on the exchange rates in dollar terms for fiscal 2016. This is the second time in this fiscal (FY 2016), the company revised guidance owing to volatile currency impacting the rupee in the foreign exchange market. On October 10, the company upped its guidance to 13.1%-15.1% from 11.5%-13.5% in rupee terms but lowered to 6.4%-8.4% from 7.2%-9.2% in dollar terms as projected in July due to currency volatility depreciating the rupee. The company also increased the conversion rate again by 0.57 cents to Rs66.16 per dollar from Rs65.59 on September 30 on a stronger greenback.
Chinese stocks closed higher on Thursday, with the benchmark Shanghai Composite Index up 1.97%, at 3,007.65 points. The smaller Shenzhen index rose 3.67% to close at 10,344.94 points, reports Xinhua. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, jumped 5.59% to close at 2,175.01 points.
Tokyo stocks declined at the opening on Thursday as Wall Street's decline overnight compounded a dour market mood resulted from major global bourses losing ground recently. As of 9.15 a.m., the 225-issue Nikkei Stock Average plunged 591. 51 points, or 3.34%, from Wednesday to 17,124.12, Xinhua news agency reported. The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, tumbled 45.57 points, or 3.16%, to 1,396.52. All categories on the main section retreated, with iron and steel, electric machinery and wholesale trade issues comprising major decliners.
The top gainers and top losers of the major indices are given in the table below:
The closing values of major Asian indices are given in the table below: