The rally will most likely be a weak one
The S&P BSE Sensex closed the week that ended on 27th March at 27,459 (down 802 points or 2.84%), while the NSE’s CNX Nifty closed at 8,341 (down 230 points or 2.68%). Previous week, we had mentioned that if Nifty remains weak, the decline may halt at around 8,300. The low was 8,269.
The Indian stock market was weak for the entire week. After several failed attempts to move up, Nifty closed Monday, lower for the fourth consecutive session. Nifty closed at 8,551 (down 20 points or 0.23%). The highlight of the day was SEBI allowing debt-to-equity conversion by banks for distressed companies, subject to certain clauses of the SEBI’s Issue of Capital and Disclosure Requirements (ICDR) regulations and takeover norms of SEBI, which are to be relaxed.
After the indecisive move on Monday, next day Nifty closed in the red. Nifty closed Tuesday at 8,543 (down 8 points or 0.09%). The Asian Development Bank (ADB), in a report said that it anticipates India's economic growth to accelerate to 7.8% in the fiscal year ending 31 March 2016, while a gross domestic product (GDP) growth of 6.3% in both 2015 and 2016 for Asia.
On Wednesday, ahead of March futures and options (F&O) expiry, the 50-share Nifty moved listlessly, but closed lower. The benchmark closed at 8,531 (down 12 points or 0.14%). Standard & Poor's (S&P) Ratings Services in its special report titled "India Credit Spotlight" said that the country’s reform drive and economic momentum could give plenty of growth opportunities to top corporates. It also said that sectors like utilities & infrastructure, metals & mining, oil & gas and telecom sectors still have high debt levels.
On Thursday, the weakness on the US indices adversely affected market sentiments in India further, pulling Nifty sharply lower. For the seventh consecutive session, the 50-stock index closed in the red at 8,342 (down 189 points or 2.21%). In a move to improve utilisation of gas-based power generation capacity in India, Cabinet Committee on Economic Affairs (CCEA) has approved a mechanism, which requires sacrifices to be made collectively by all stakeholders, including the Central and State Governments, by way of exemptions from certain applicable taxes and levies on the incremental RLNG being imported for the purpose.
Meanwhile, finance Minister Arun Jaitley said that he hopes to pass the Constitution Amendment Bill for the introduction of Goods and Services Tax (GST) in second half of the Budget session, which begins on 20 April 2015. The US and India are planning to launch negotiations to sign a high-quality bilateral investment treaty to create an enabling business environment in India.
On Friday, Nifty opened in the green and continued to move in a range. However, by the end of the morning session, it gave up all the intra-day gains and moved in the red. This was followed by the benchmark making an effort to revive, which ended with it closing flat. Nifty closed at 8,341 (down 0.75 points or 0.01%).
Among the news of the day was that the price of domestic natural gas prices would be slashed by 9% to $4.56 per unit from 1st April to reflect the softening in international prices, benefiting users in the power and fertiliser sectors.