Nifty will decline sharply, if it closes below Tuesday's low of 7,638
We mentioned on Tuesday that the NSE's CNX Nifty will head higher. However, this turned out to be wrong because of continued decline in global markets. For the entire session on Wednesday, the domestic indices traded in the negative. After witnessing a range bound movement during the morning session, the benchmark indices made a move further lower in the afternoon session and ultimately, the benchmarks closed near their intra-day lows. Weakness on the US indices on Tuesday cast a negative shadow on the Asian bourses today.
The S&P BSE Sensex opened at 25,893 while the Nifty opened at 7,726. Sensex reached up to 25,902 while Nifty managed to reach the level of 7,741. Both the indices managed to keep themselves above past four day’s low (including today). The Sensex hit a low of 25,622 and closed at 25,665 (down 243 points or 0.94%) while Nifty hit a low at 7,659 and closed at 7,672 (down 75 points or 0.96%). The NSE recorded a lower volume of 81.10 crore shares. India VIX rose 2.50% to close at 14.2975.
Except for IT (0.59%) all the other indices on the NSE closed in the red. The top five losers were PSU Bank (2.20%), Metal (1.97%), Bank Nifty (1.86%), Finance (1.61%) and FMCG (1.49%).
Of the 50 stocks on the Nifty, 12 ended in the green. The top five gainers were Infosys (1.34%), Power Grid (1.28%), Asian Paints (1.04%), M&M (0.80%) and Reliance Industries (0.63%). The top five losers were ITC (2.99%), PNB (2.71%), ICICI Bank (2.67%), Sesa Sterlite (2.44%) and Axis Bank (2.35%).
Of the 1,613 companies on the NSE, 716 companies closed in the green, 821 companies closed in the red while 76 companies closed flat.
Today the Indian rupee turned weak to reach its lowest since 14 March 2014. Rupee on Wednesday closed at 61.336 against the US dollar.
Deadlock continued between the Indian government and the opposition over clearance of insurance bill in the Rajya Sabha. Over the past week, the government has reportedly twice sought to introduce legislation in the upper house of parliament permitting 49% foreign participation in an insurance venture, up from 26%, but it has been blocked by the opposition.
Life Insurance Corporation of India (LIC) is looking at equity investments of around Rs60,000 crore for 2014-15. Its chairman SK Roy said the government-run insurer is positive on Indian stocks. "I see further upside for market in FY15," Roy told a business channel.
With government announcing the re-introduction of tax incentives for investors in wind energy, Suzlon Energy is confident of boosting its India business. Suzlon Energy (4.79%) was among the top two gainers in ‘A’ group on the BSE.
Bhushan Steel (20%) was the top loser in ‘A’ group on the BSE. CBI Director Ranjit Sinha has reportedly ordered an internal inquiry after his team did not arrest Bhushan Steel's vice-chairman Neeraj Singhal during searches at his residence in the Syndicate Bank bribery case, despite clear instructions to pick him up. Singhal is on the run from the time of the raid and the CBI has been trying to trace him, so that he can be arrested, reports added. Neeraj Singhal has filed an anticipatory bail application in a local court.
Infosys (2.01%) was the top gainer in Sensex 30 pack. The gain is on the back of the news that the former finance chief of Infosys is leading an effort to persuade his former employer to buy back shares. V Balakrishnan, who resigned from the company in December 2013, is of the view that a share repurchase will bolster confidence in the new chief executive officer Vishal Sikka.
Today all the banking stocks in the Sensex 30 stock were among the losers. ICICI Bank (2.60%), Axis Bank (2.42%), SBI (1.75%) and HDFC Bank (1.27%) were among the major losers.
US indices closed Tuesday in the negative. Service industries in the US expanded in July at the fastest pace since December 2005, according to data from the Institute for Supply Management. Another release showed factory orders rose 1.1% in June, above estimates.
Except for Taiwan Weighted (0.03%) all the other trading Asian indices closed in the negative. Nikkei 225 (1.05%) was the top loser. European indices were trading in the red. US Futures too were trading sharply lower.
German factory orders dropped the most in more than two and half years indicating that geopolitical tension with Russia is leaving its mark on Europe's largest economy. Orders, adjusted for seasonal swings and inflation, slid 3.2% in June from May, when they fell a revised 1.6%, the Economy Ministry in Berlin said today.
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