Stocks
Sensex, Nifty headed lower – Monday closing report

Nifty has a started a short downward journey. Intraday rallies will be met with selling

 

We had mentioned in Friday’s closing report that the NSE's CNX Nifty is trapped in a trading zone and we may see the index making an effort to gain. On Monday the index opened lower, tried to rally but finished at the lower end of the range. We expect the indices to move further down.


S&P BSE Sensex opened lower at 26,998 which was also the day’s high, while teh 50-share Nifty opened at 8,070 and hit a high almost at the same level. Both the indices hit a 10-day low (including today) at 26,791 and 8,030. Sensex closed at 26,817 (down 244 points or 0.90%), while Nifty closed at 8,042 (down 64 points or 0.78%). This is the highest one-day percentage loss since 8 August 2014. NSE recorded a volume of 104.84 crore shares. India VIX rose 7.20% to close at 13.2550.


Among the other indices on the NSE, the top five gainers were Media (1.36%), Pharma (0.72%), Smallcap (0.57%), PSU Bank (0.51%) and Midcap (0.24%) while the top five losers were Metal (1.60%), Commodities (1.24%), Energy (0.95%), IT (0.82%) and CPSE (0.80%).


Of the 50 stocks on the Nifty, 11 ended in the green. The top five gainers were Lupin (4.34%), United Spirits (2.69%), Cipla (2.33%), PNB (1.31%) and Hero MotoCorp (1.18%) while the five losers were Jindal Steel (4.98%), Hindalco (3.20%), Ambuja Cements (2.09%), Kotak Mahindra Bank (2.08%) and Ultratech Cement (2.06%).
Of the 1,630 companies on the NSE, 851 companies closed in the green, 731 companies closed in the red while 48 companies closed flat.


On Friday, after market hours, the data released by the government showed the index of industrial production growth moderating to 0.5% in July 2014, from revised 3.9% rise recorded in June 2014, while the annual rate of inflation based on the combined consumer price indices for urban and rural India eased to 7.8% in August 2014, from 7.96% July 2014. Today, the market awaited the release of the inflation data based on the wholesale price index (WPI) for August 2014. The annual rate of inflation based on the monthly WPI decelerated to 3.74% in August 2014, from 5.19% in July 2014. The deceleration in inflation based on the wholesale price index (WPI) was sharper than market expectations.


Advance tax payment by India Inc today, 15 September 2014 will provide clues about Q2 September 2014 corporate earnings. Major banks like State Bank and Bank of India have reported higher tax payments.


Reserve Bank of India (RBI) Governor Raghuram Rajan said at a banking conference that inflation was still high and there was no point in cutting interest rates to see inflation pick up again. The RBI wants to bring down interest rates when it is "feasible", Rajan said.


He also said that there was a need to change the management appointment process in public sector banks to make it more transparent and that the central bank is in talks with the government to improve governance in public sector banks.


Future Retail (6.93%) was among the top two gainers in ‘A’ group on the BSE. There are reports that the Union government might allow foreign portfolio investors’ to hold even majority stake in retail companies.


Yes Bank (4.99%) was the top loser in ‘A’ group on the BSE. The stock witnessed correction today after hitting 52-week high on Friday. According to the reports, foreign investors will need the Reserve Bank's approval to buy equity in the bank as it has reached the limit allowed for overseas shareholding.


Cipla (2.80%) was the top gainer in the Sensex 30 pack. The stock today again hit its all-time high. There are reports that US-based drug maker Gilead Sciences may join hands with at least five Indian generic pharmaceutical companies for manufacturing and selling cheaper versions of its new hepatitis C medicines. Among others, Cipla is likely to sign the deal with Gilead Sciences.


Weak data from China raised concern. China is the world's largest consumer of steel, copper and aluminium. Hindalco (3.08%), Tata Steel (2.06%) and Sesa Sterlite (1.86%) were among the top three losers in the Sensex 30 stock.


US indices closed Friday in the negative. In the quarterly report released on Sunday, the Bank for International Settlements has reportedly warned that international borrowing and low volatility are increasing the risk for emerging-market assets. International borrowing by companies in some emerging markets now matches the output of their economies, leaving bondholders more vulnerable to interest rate or currency shocks, the BIS has said, according to reports. The BIS, known as the central bankers' bank, hosts the Basel Committee on Banking Supervision which sets global capital standards.


Except for Shanghai Composite (0.31%) and Jakarta Composite (0.02%) all the other trading Asian indices today closed in the negative. Straits Times (0.99%) was the top loser.


Factory production in China rose 6.9% in August from a year earlier, the statistics office reported on 13 September 2014, down from 9% in July. It was the slowest pace outside the Lunar New Year holiday period of January and February since December 2008. Growth in fixed-asset investment slowed to 16.5% in August, while retail sales expanded 11.9% in August, easing from 12.2% in July.


European indices are showing mixed trends, while US Futures were trading marginally lower.

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COMMENTS

LALIT SHAH

3 years ago

Tomorrow market will surge and will cover today's loss
As high gas prices allow to reliance industries and sensex will make up today's loss

LALIT SHAH

3 years ago

Tomorrow market will surge and will cover today's loss
As high gas prices allow to reliance industries and sensex will make up today's loss

Fortnightly Market View: A Step Back, To Move Forward

A short-term decline and then a rally?

 
Last fortnight, I had suggested that the market may undergo a short-term correction. The Sensex was at 26,638 two weeks ago. It is now at 27,061.04, about 300 points higher over a two-week period. Even though investors have pushed the market higher, the indices have found it hard to make much advance. My view remains the same—we are due...
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Sensex, Nifty in no man’s land – Weekly closing report

Nifty will suffer a decline once it goes below 8,050

 

The S&P BSE Sensex closed the week that ended on 12th September at 27,061 (up 34 points or 0.13%), while the NSE's CNX Nifty ended at 8,106 (up 19 points or 0.23%). Previous week, we had mentioned that the Nifty may give up some gains and if the index goes down, the support lies between 8,000 and 7,950. This week, the index dipped during the week, but went down only to the level of 8,057.


Nifty had a strong opening on Monday. Opening gap on the index was the highest, since 12 August 2014. It managed keeping itself above Friday’s close throughout the session. The benchmark closed almost near to its day’s high, which was also its life time high, so also new life time high closing. Nifty closed at 8,174 (up 87 points or 1.08%).


Moody's said that the changes in the rules for raising Basel III-compliant capital, announced by the Reserve Bank of India (RBI) this month, are "credit positive", as they make it easier for banks to raise funds and attract more investors.


As we had anticipated last week, weakness on the bourse set in on Tuesday. Nifty closed at 8,153 (down 21 points or 0.26%).


The news making round on Tuesday was that the Indian government has left it to the apex court to decide on the issue of cancellation of coal blocks. The government gave details of about 40 operational coal blocks and six blocks which are ready to be functional to the Supreme Court. While among other news, Commerce Minister Nirmala Sitharaman said that the government will not allow foreign direct investment in multi-brand retail.


The benchmark closed in the negative for the second consecutive session after trading in a narrow range on Wednesday. Nifty closed at 8,094 (down 59 points or 0.72%). Among other news affecting the market sentiment was the import duty issue on gold. Nirmala Sitharaman said that the government is not considering an immediate gold import duty cut despite the current account deficit coming down. In 2013 the government had raised the import duty on gold to 10%.


Correction on the index continued on Thursday when it fell further although marginally. Nifty closed at 8,086 (down 8 points or 0.10%). Cabinet Committee on Economic Affairs approved stake sales in three PSUs namely ONGC (5% stake), Coal India (10% stake) and NHPC (11.36% stake).


In the last hour of the session on Friday, Nifty managed making a strong upmove. Nifty closed at 8,106 (up 20 points or 0.24%) after three negative days. The Indian government is looking at the proposal for extending excise duty concessions to the automobile sector beyond December. It is also considering the possibility of surplus cash of state-owned enterprises, including those of Maharatnas and Navratnas, lying idle in banks, to be used to nurse ailing PSUs that can be revived back to health.


After market hours, the government released the combined inflation of August 2014 and index of industrial production (IIP) of July 2014. Combined inflation for urban and rural areas eased marginally to 7.80% in August 2014 from 7.96% in July 2014. The IIP rose 0.5% in July from a year ago, the slowest in four months.


For the week, among the other indices on the NSE, the top two performers were PSU Bank (5%) and Smallcap (4%), while the worst two performers were PSE (1%) and Energy (1%).


Among the Nifty stocks, the top five stocks for the week were Cipla (10%); Bank of Baroda (7%); Punjab National Bank (5%); State Bank of India (5%) and IDFC (4%), while the top five losers were Sun Pharma (6%); NMDC (5%); NTPC (4%); Coal India (3%) and Oil & Natural Gas (3%).


Of the 1,472 companies on the NSE, 1,199 companies closed in the green, 250 companies closed in the red while 23 companies closed flat.


Out of the 27 main sectors tracked by Moneylife, the top five and the bottom five sectors for this week were:

 

ML Top sector

 

ML Worst sector

 

Auto Components

7%

Oil & Gas

-2%

Textiles

6%

Energy

-1%

Shipping

6%

Steel

0%

Chemicals

5%

Hotels

0%

Sugar

5%

Non-Ferrous Metals

0%

 

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