Nifty hit the support level of 6,286 on Wednesday and went up. The uptrend will be threatened only below 6,295
The market closed Wednesday in the negative for the second consecutive day, after hitting a three day low (including today). In the last few minutes the benchmark tried recovering the loss but failed to close in the positive.
Reserve Bank of India (RBI) Governor Dr Raghuram Rajan today said that the central bank's focus remains on controlling inflation. Rajan added the rupee had stabilised "somewhat", but said there is no room for complacency. He also called on the government to continue its efforts to contain the fiscal deficit and said raising subsidised diesel prices to market levels would help. Rajan also said the RBI would introduce measures to improve liquidity and depth in government bonds, known widely in India as G-secs. The Reserve Bank of India will announce next week’s steps to recognise and resolve financial stresses, including making it more expensive for so-called wilful defaulters to borrow funds.
The Sensex and the Nifty traded in the negative for the entire trading session. Sensex opened at 21,191 and Nifty at 6,307. In the last hour Sensex hit a low of 21,069 and closed at 21,171 (down 84 points or 0.39%) after hitting a high of 21,216. The Nifty hit a low of 6,280 from which it recovered to hit a high of 6,327 and closed at 6,307 (down 25 points or 0.39%). The NSE recorded a lower volume of 55.10 crore shares.
Among the other indices on the NSE, except for Media (up 1.14%); FMCG (up 0.63%) and MNC (up 0.18%) all the other indices closed in the negative. The top five losers were PSU Bank (2.16%); Infra (1.42%); Auto (1%); PSE (0.90%) and Nifty Midcap 50 (0.87%).
Of the 50 stocks on the Nifty, 19 ended in the green. The top five gainers were NTPC (2.32%); HDFC (1.86%); HCL Technologies (1.74%); Axis Bank (1.36%) and Coal India (1.26%). While the top five losers were Tata Motors (3.38%); Bank of Baroda (2.17%); State Bank of India (2.13%); BPCL (2.12%) and Tata Power (2.11%).
Out of the 1,220 stocks on the NSE, 460 closed in positive, 693 closed in the negative while 67 remain unchanged.
Rating agency Standard & Poor's (S&P) today said that India's sovereign rating may come under pressure if general elections due by May next year end up with a hung parliament or with a government unable to push through reforms. S&P has a "negative" outlook on India's sovereign ratings, meaning any downgrade from its current "BBB-minus" would place the country's debt in so-called "junk."
Finance Minister P Chidambaram today said that the government will not compromise on fiscal prudence and will contain its fiscal deficit and narrow it to 3% of gross domestic product by the fiscal year ending in March 2017. The comments come a day after Fitch Ratings had warned the setback for the Congress party in recent state elections could imperil the fiscal deficit target by tempting the government to have less restraint on spending. The finance minister also highlighted the government would do all it can to moderate inflation, given the RBI only has monetary policy as a "blunt tool" to contain rising food prices.
US indices closed in the negative on Tuesday. Investors weighed federal budget negotiations and better-than-estimated economic data to gauge the timing of any Federal Reserve stimulus cuts. The US budget deal, worked out between chief negotiators Senator Patty Murray and Representative Paul Ryan, would set spending at about $1.01 trillion in 2014, higher than the $967 billion required in a 2011 budget accord. A partial shutdown in October lasted for 16 days because lawmakers couldn't agree on how to fund the government. All the Asian indices closed on the negative. Hang Seng was the top loser which fell 1.71%.