Nifty has to close above 8,100 to put in a short rally
We had mentioned last week that NSE’s CNX Nifty continues to remain weak and a close above 8,200 is needed for the down move to end temporarily. The 50-stock index opened Monday marginally higher and immediately hit the day’s high, but was pulled lower. The benchmark moved down gradually and closed in the red for the sixth consecutive session. This is the third instance for the year 2015, when the 50-stock Nifty has continued to post losses on six successive trading sessions. The previous two were the seven days of losses ending on 9 February 2015 and eight days of losses ending 27 March 2015.
The S&P BSE Sensex opened at 26,814 while Nifty opened at 8,124. After immediately hitting a high at 26,827 and 8,131, the benchmarks went down. At the end of the session, the Sensex hit its low at 26,473 and closed at 26,523 (down 245 points or 0.92%). Nifty too hit its low at 8,031 and closed at 8,044 (down 71 points or 0.87%). Bank Nifty moved in the red for the entire session. It opened at 17,543 and moved in the range of 17,358 and 17,561. It closed at 17,433 (down 117 points and 0.66%). NSE recorded a volume of 67.05 crore shares. India VIX rose 4.41% to close at 18.8850.
The Reserve Bank of India (RBI) is scheduled to announce current account deficit (CAD) data for Q4 March 2015 later in the day. India's CAD narrowed to $8.2 billion or 1.6% GDP in Q3 December 2014 from $10.1 billion or 2% of GDP in Q2 September 2014.
Oil cartel Organization of the Petroleum Exporting Countries (OPEC) had decided to keep its collective output level unchanged at 30 million barrels a day. This was the second time in six months that it decided to take no action amid a global glut of crude and weak oil prices.
The India Meteorological Department (IMD) had said that the conditions are favourable for further advance of southwest monsoon into some more parts of central Arabian Sea & Karnataka, remaining parts of Tamilnadu, some parts of Rayalaseema and Coastal Andhra Pradesh and some more parts of central Bay of Bengal over the next two days.
Coming back to stock markets, Bhushan Steel rose 18.51% to close at Rs71.70. It was the top gainer in ‘A’ group on the BSE. It was in the news, as the RBI had announced a scheme for long term structuring of loans in line with cash flows. The lenders’ forum has agreed to extend the loans of the company for the tenure of 25 years under the scheme. However, the banks have to approve the scheme.
Sun TV fell 21.73% to close at Rs 278.90 on the BSE. It hit its 52-week low today. It was the top loser in ‘A’ group on the BSE. The 33 television channels that Sun TV Network had applied to Information and Broadcasting Ministry (I&B) Ministry for renewing its broadcasting licence for 10 years, which required security clearance from the Home Ministry. According to reports, the home ministry's rejection of the security clearance to Sun TV channels has been influenced by pending criminal cases against Kalanithi Maran and his brother and former Union minister Dayanidhi Maran. Kalanithi Maran is the promoter of Sun TV Network. The rejection of the security clearance may lead to cancellation of the channels' broadcasting licence.
Tata Power rose 1.13% to close at Rs71.40 on the BSE. The stock was the top gainer in the Sensex 30 pack. Vedanta fell 3.12% to close at Rs177.05 on the BSE. It was the top loser in the pack.
On Friday, the US indices had mixed closing.
The Labour Department said the US economy generated 280,000 new jobs in May. The Labour Department also revised the jobs figures from March and April. March was revised up to 119,000 from 85,000, while April was revised a touch lower to 221,000 from 223,000. The unemployment rate edged up to 5.5%, but mainly because more Americans entered the labour force in search of work.
The International Monetary Fund (IMF)'s deputy managing director warned on Monday that there is considerable risk for negative spillover from the US Federal Reserve's pending interest rate hike.
Asian indices showed mixed performance. Shanghai Composite (2.17%) was the top gainer while Jakarta Composite (1.68%) was the top loser.
China's exports fell 2.5% in May from a year earlier in dollar terms, after a drop of 6.4% in April, data from the General Administration of Customs showed today. Imports in May fell 17.6% from a year earlier, compared with a 16.2% drop in April. China's trade surplus has widened in May to $59.49 billion from $34.1 billion in April.
Japan's economy grew faster than initially estimated in the first quarter. Gross domestic product, the broadest measure of the nation's economic activity, expanded at an annualised pace of 3.9% in January-March, according to data released today.
European indices showed mixed performance while US Futures were trading marginally in the negative. The head of the European Union reportedly rebuked Greek Prime Minister Alexis Tsipras in unusually sharp terms on Sunday and warned that time was running out for Athens to reach a debt deal with its lenders to avert default. Greece had opted to bundle its June loan payments to the International Monetary Fund and make them at the end of the month.
Germany's Industrial production, adjusted for inflation and seasonal swings, increased 0.9% in April from the previous month, data from the federal statistics office Destatis showed today.