Sensex, Nifty in no man’s land: Thursday Closing Report

A close above 5,865 on the Nifty would see the upmove continuing. However, if the benchmark closes below 5,760 we may see it heading towards 5,565

The market snapped its two-day decline as buying in index stocks in the late session lifted the benchmarks higher. A close above 5,865 on the Nifty would see the upmove continuing. However, if the benchmark closes below 5,760 we may see it heading towards 5,565. The National Stock Exchange (NSE) witnessed a turnover of 65.83 crore shares and advance-decline ratio of 754:621.
The market opened in the positive as two successive days of losses made stocks cheaper and on supportive global cues. The US markets closed higher in a short trading session on Wednesday, ahead of Thursday’s Independence Day holiday, on reports of a fall in weekly jobless claims and a rise in private sector employment. The better-than-expected US job report boosted the Asian markets in morning trade.
The Nifty gained 24 points over its previous close to resume trade at 5,795 and the Sensex started the day at 19,256, up 78 points. Support from healthcare, power, capital goods and IT stocks kept the momentum firm in early trade. 
The indices pared a small part of their gains on profit booking and touched their intraday lows at around 10.00am. The Nifty slipped to 5,786 and the Sensex went back to 19,245, at their respective lows.
Buying in IT, FMCG and oil & gas counters pushed the benchmarks higher in late morning trade. A higher opening of the key European markets also supported the sentiment in the second half of the trading session. 
The volatile market once again edged lower in post-noon trade, after the RBI governor asked banks to lower lending rates to attract investments. However, buying in index stocks in the late session saw the market hitting its high with the Nifty touching 5,848 and the Sensex climbing to 19,445. The market settled near the highs of the day, snapping its two-day decline.
The Nifty closed 66 points (1.14%) up at 5,837 and the Sensex finished the day at 19,411, a gain of 233 points (1.22%).
Among the broader indices, the BSE Mid-cap index gained 0.52% and the BSE Small-cap index rose 0.21%.
The top sectoral gainers were BSE IT (up 2.73%); BSE Fast Moving Consumer Goods (up 2.69%); BSE TECk (up 2.35%); BSE Realty (up 1.56%) and BSE Consumer Durables (up 1.23%). BSE Metal (down 0.29%) was the lone loser while BSE Capital Goods ended flat.
Out of the 30 stocks on the Sensex, 20 stocks settled higher. The gainers were ITC (up 3.74%); Tata Power (up 3.58%); TCS (up 3.26%); Tata Motors (up 2.80%) and Bharti Airtel (up 2.38%). The main losers were Tata Steel (down 1.73%); BHEL (down 1.63%); Sterlite Industries (down 1.13%); Bajaj Auto (down 1.02%) and ONGC (down 0.84%).
The top two A Group gainers on the BSE were—UCO Bank (up 9.23%) and TTK Prestige (up 7%).
The top two A Group losers on the BSE were—Ashok Leyland (down 7.69%) and MMTC (down 4.98%).
The top two B Group gainers on the BSE were—Control Print (up 20%) and Firstsource Solutions (up 19.92%).
The top two B Group losers on the BSE were—Gennex Laboratories (down 19.59%) and Empee Distilleries (down 18.45%).
Of the 50 stocks on the Nifty, 35 ended in the in the green. The major gainers were Reliance Infrastructure (up 4.09%); HCL Technologies (up 3.95%); ITC (up 3.88%); Tata Power (up 3.63%) and BPCL (up 3.54%). The key losers were BHEL (down 2.40%); Tata Steel (down 1.71%); Sesa Goa (down 1.53%); Cipla (down 0.79%) and Axis Bank (down 0.78%).
Markets across Asia, with the exception of the Nikkei and the Taiwan Weighted, closed higher on positive growth signals from the US. Besides, assurance by the Chinese premier Li Keqiang to support infrastructure growth also boosted investor confidence.
The Shanghai Composite gained 0.59%; the Hang Seng surged 1.60%; the Jakarta Composite added 0.10%; the KLSE Composite rose 0.12%; the Straits Times advanced 0.56% and the Seoul Composite climbed 0.79%.
At the time of writing, the key European indices were in the green and the US stock futures were trading with gains. However, the US markets will remain closed for trade today for the Independence Day holiday.
Back home, foreign institutional investors were net sellers of equities totalling Rs705.06 crore on Wednesday while domestic institutional investors were net buyers of shares amounting to Rs252.88 crore.
Pune-based Deepak Fertilisers and Petrochemicals Corporation (DFPCL) has acquired 2,89,91,150 equity shares of face value Rs 10 each, representing 24.46% of share capital of Mangalore Chemicals and Fertilisers. The stock rose 0.43% to close at Rs94.40 on the NSE. 
The largest Direct-to-Home (DTH) service provider Dish TV India has decided to increase prices of its set-top box by Rs250. The hike will be effective from today. While its standard definition set-top box will now be priced Rs2,249, its Dish plus recorder will cost Rs2,349. The company said there was no price rise on high-definition set-top boxes. The stock fell 0.24% to close at Rs61.80 on the NSE.


Govt considering ban on sale of TB drugs in open market
The health ministry is proposing changes in view of irregularity in administration of these drugs to patients and lack of proper monitoring which is hindering efforts to check the disease

Sale of tuberculosis (TB) drugs could be prohibited in the open market as part of efforts to ensure calibrated and monitored administration of these medicines which would then only be given on a daily basis free of cost by government-registered outlets to patients.  
The health ministry is proposing changes in view of irregularity in administration of these drugs to patients and lack of proper monitoring which is hindering efforts to check the disease. 
According to a WHO estimate, India is home to the largest number of TB patients—2.2 million of the world's 8.7 million. 
Patients are administered TB medicines either through government-run hospitals and clinics free of cost or by private practitioners. 
According to the health ministry, about 65% of the TB patients avail these drugs under the government’s DOT (Daily Observed Therapy) System while the rest opt for treatment by private practitioners and buy drugs from the chemists based on their prescription. 
The latter results in irregularity of treatment which leads to relapse of the ailment as there is lack of proper monitoring, the sources said citing experts. 
To address this, the government is planning to prohibit sale of drugs in open market. 
Under the new initiative, patients going to private practitioners for treatment will get medicines free of cost from chemists but only after the doctor informs them through a dedicated call centre to be set up by the government. 
The changes are being brought to ensure that all TB patients are administered the drugs on daily basis instead of intermittently as at present. 
Recently, health minister Ghulam Nabi Azad had expressed concern on the issue saying that the irregular regime is leading to growing resistance to anti-TB drugs. 
The health ministry officials recently had held a meeting with WHO and other experts who had emphasised on changing intermittent dosage system to daily regime. 
During the meeting, it was informed that many other countries including Brazil, China, which were following the intermittent dosage system, have now turned to the daily regime.


“US payroll data to determine further direction in gold”

Gold could come under severe selling pressure if Friday’s US job reports point at further improvement in the labour sector, said Anand Rathi in its report

Monthly payrolls data from the US offer good insight into the health of the world’s largest economy. As such, they are closely monitored by bullion traders and investors. Gold has been very sensitive to the outcome of these reports. This has been the case in the past few months, ever since the Fed stated that the continuation of its asset purchases would depend on the progress in the labour market, according to Anand Rathi Commodity Research in its report “Gold-Caution Ahead”. One of the key reasons that have kept gold under pressure this year has been signs of improvement in the labour sector. [Since the introduction of QE3 last September, the jobless rate in the US has declined from around 8% to a four-and-half -year low, while the payrolls data releases have indicated a steady pace of hiring by employers.]


If the labour report on Friday points to further improvement, speculation will intensify that the Fed could start tapering its QE from after the September meeting. This would benefit the dollar and lift Treasury yields to fresh multi-week highs. This combination would reduce the appeal for gold and push prices back the year-to-date low ($1,180), and possibly further lower in the coming sessions.


However, if the data hints that progress in the labour market might be slowing down, speculation of an imminent tapering off of QE is likely to abate. This would benefit gold and lift it towards $1,300, said the Anand Rathi report.



From the above table, it may be observed that most of the national employment reports which have come out from the US (for June) have indicated further progress in the labour sector. The ISM manufacturing employment index was the only dark spot, as it unexpectedly contracted in June for the first time since September 2009. However, the effect of this is likely to be restricted as the ISM non-manufacturing employment index last month rose handsomely to a four-month high. (In the US, the non-manufacturing sector constitutes nearly 90% of the economy). Considering all this, there is a good possibility that the non-farm payrolls report for June, due later on Friday, could top market estimates of 165,000.


The outcome of the payrolls data would be very crucial to gauge the further direction in gold, as it would offer clues surrounding the timing of the tapering off of the QE. Recent labour reports from the US have shown a steady pace of jobs addition in the world’s largest economy. “If the latest labour data are supportive while the unemployment rate slides, speculation that the Fed at the September meeting would decide to roll back its stimulus would gain further momentum. This would reduce the appetite for gold.


“However, if the data falls short of market expectations and prints below 150,000, speculation about a decision at the September meet regarding the QE being tapered down would certainly ease”, said the Anand Rathi report. This could lead to considerable short covering in gold and boost prices.


“Meanwhile, we expect gold to be modestly squeezed even if the data prints in line with market expectations as this would indicate the steady progress being made in the labour sector” Anand Rathi concluded.


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