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

2 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

2 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

Placing Sectoral Bets
With the market having rallied significantly on positive economic prospects and higher earnings, most sectors have performed well. But, going ahead, certain sectors will do better than others. In fact, there is some correlation between the different stages of business cycles and sectoral performance. Investing in the right sector which corresponds to the business cycle will mean better returns from your investment.
 
A business cycle essentially represents distinct changes in the rate of economic activity. The stage of a business cycle can be identified by observing indicators such as gross domestic product growth, employment, corporate profits, credit and inventories. Fluctuations in the business cycle can be a critical determinant of sector performance. Every business cycle is different in its own way, but certain patterns have tended to repeat themselves over time. While unforeseen macroeconomic events can sometimes disrupt a trend, changes in these key indicators have historically provided a relatively reliable guide to recognising the different phases of an economic cycle.
 
In a rising cycle, automobiles, travel, hospitality, infrastructure, etc, begin to boom. These are known as ‘cyclical sectors’. From January 2004 to January 2008, when the economy was in a growth phase, cyclical sectors delivered average annual returns of 40%.
 
When there is an economic slowdown, ‘defensive stocks’ from utilities, pharmaceuticals and healthcare sectors tend to do well and provide relatively stable returns. From January 2008 to January 2014, which included one of the worst financial crises of our times, defensive companies delivered over 16% annually.
 
How can an investor benefit from this approach? An investor could choose a top performing equity diversified scheme or an equity scheme that has no static market-cap bias or sector bias and will invest across companies and industries based on economic trends. The managers of the scheme could use various indicators such as earnings growth trends, credit growth, consumer spending and other relevant factors to determine which sector or company would be likely to perform well. A fund manager, who picks the right stocks from the right sector, is likely to outperform over the long term.

User

YouTube videos to be available offline & free in India!

YouTube will be available offline in India in the coming weeks. This means you can download YouTube videos when connected to a high speed network, and watch it later without using Internet connection

 

Soon Indians would be able to download and store YouTube videos on their mobile phones. While launching its Android One platform, Google said in the coming weeks YouTube would be available in India for offline usage.

 

“Within the coming few weeks, much of YouTube will be available offline in India. This is huge, and our users will really, really like this. You can download a video once, save it to your phone, and watch it again and again,” said Caeser Sengupta, Product Management Director at Google during the launch event.

 

This means one can download a video, while online, and watch it later without the data connection. Exact details of this offer are not available. According to media reports, this download would be free of any cost (except data charges) in India. However, it is not clear, if this offer would be free for limited period because Google reportedly is launching its subscription service at $9.99 per month.

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COMMENTS

Sankar Amburkar

2 years ago

Is this a big deal? Even when you watching if offline, Google can identify what video you are watching and display Ads accordingly.

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