Sensex, Nifty may move higher – Monday closing report

Nifty should stay above 7,550 for it to gain further strength

We had mentioned in our Friday’s closing report that the S&P BSE Sensex and NSE Nifty may be up for a short rally. After opening with a big gap, the indices on Monday held the gains and rose higher. In the last hour, both the indices made a quick upmove to hit the day’s high.

The Sensex opened at 25,180, while the Nifty opened at 7,534. Sensex moved up to 25,461 and closed at 25,414 (up 314 points or 1.25%), while Nifty hit a high of 7,624 and closed at 7,611 (up 103 points or 1.37%). The NSE recorded a turnover of 98.51 crore shares. India VIX rose 1.39% to close at 17.8725.

All the other indices on the NSE closed in the green. The top five gainers were PSU Bank (3.42%), Nifty Midcap 50 (3.02%), PSE (2.57%), Infra (2.48%) and CPSE (2.26%).

Of the 50 stocks on the Nifty, 42 ended in the green. The top five gainers were BPCL (5.32%), IDFC (5.30%), PNB (4.31%), Sun Pharma (4.03%) and Tata Power (3.85%). The top five losers were United Spirits (3.87%), Maruti (0.70%), Bajaj Auto (0.61%), M&M (0.48%), Tata Motors (0.40%).

Of the 1,581 companies on the NSE, 1,140 companies closed in the green, 390 companies closed in the red while 51 companies closed flat.
India and China on Monday signed three key memorandums of understanding (MoUs). The MoU on industrial parks is aimed at attracting Chinese investments in India and provides an enabling framework for Chinese companies to invest in industrial parks and zones.

As crude prices dropped, concerns arising from the impact of high crude oil prices on India's macroeconomic situation eased. A monthly revision in diesel prices is due later in the day i.e. 30 June 2014.

PSU Banks are in focus these days. There had been news that the government is likely to take a decision on a proposal to create a holding company structure for public sector banks before the Budget and a roadmap for this is likely to be announced in the budget. Syndicate Bank (10.90%), Allahabad Bank (9.18%), Andhra Bank (7.69%), Canara Bank (6.77%), IOB (6.68%), Union Bank (6.18%), Bank of India (5.94%), Oriental Bank (5.84%), Dena Bank (5.64%) and Uco Bank (5.37%) were among the top 15 gainers in the ‘A’ group on the BSE.

United Spirits (4.21%) was the top loser in the ‘A’ group on the BSE. The company was recently in the news when UK-based Diageo Plc made an open offer to buy a 26% stake in the Indian company in April. The open offer, which ended recently, was made at Rs3,030 per share. Sun Pharma (3.87%) was the top gainer in the Sensex 30 pack. Taro, Israel-based subsidiary of Sun Pharma, recently hiked the price of 11 products. Sun owns a 70% stake in Taro. Maruti (0.47%) was among the top two losers in the Sensex.

US indices closed in the positive on Friday. The number of Americans seeking unemployment benefits declined last week, the latest evidence that a sharp economic slowdown earlier this year hasn't caused employers to cut jobs. Weekly unemployment benefit applications fell by 2,000 to a seasonally adjusted 312,000, the Labor Department said on Thursday.

Except for Hang Seng (0.13%), NZSE 50 (0.05%) and Straits Times (0.47%), all the other Asian indices closed in the green. Taiwan Weighted (0.93%) was the top gainer.

European indices are showing mixed trends, while US Futures are trading in the negative.


SEBI disposes representation of two involved in IPO manipulations

The market regulator disposed off representation made by Dushyant N Dalal and Puloma D Dalal, who have been restrained from securities market for seven years

Market Securities and Exchange Board of India (SEBI) has disposed of a representation made by two individuals, who had sought the vacation of restrictions imposed on them with respect to securities market dealings.


The representation made by Dushyant N Dalal and Puloma D Dalal, who have been restrained from securities market for seven years starting 21 July 2009, has been disposed of, SEBI said in an order.


After finding that they indulged in fraudulent, deceptive and manipulative practices in initial public offers (IPOs) of various companies, SEBI had directed them to pay a disgorgement amount of Rs6 crore. The amount included simple interest at the rate of 12% annum for four years (2005-09) on the unlawful gain of over Rs4 crore.


In its order on 21 July 2009, SEBI had said that in case Rs6 crore disgorgement amount is not paid within 45 days of the order, the two would be restrained from dealing in the securities market for a further period of seven years.


SEBI also said the request made by the applicants for vacating the restraint imposed on them for non-compliance with the disgorgement order within the time stipulated in the order cannot be acceded to.


"A view on the quantum of penalty to be levied on the applicants have already been taken in the SEBI order. The applicants are undergoing the restraint only because of their non-compliance with the disgorgement order and as directed vide the SEBI order," Prashant Saran, whole time member of SEBI said.


Onion prices zoom 40% in just two weeks at Lasalgaon

In last one month, onion prices have jumped by 90% to Rs18.50 per kg as against Rs9.75 per kg on 30th May

Over the past two weeks, onion prices at Lasalgaon, the country’s largest wholesale market for the edible bulb, jumped almost 40% to Rs18.50 per kg. This is despite the imposition of minimum export price (MEP) on the vegetable to check its domestic rates from going up.


According to RP Gupta, director of National Horticultural Research and Development Foundation (NHRDF), onion prices have increased due to speculation amid anticipation of weak monsoon affecting Kharif (summer-sown) crops.


The impact of rise in onion prices at Lasalgaon in Nashik is being felt at Delhi’s Azadpur market where they are ruling at Rs15-25 per kg depending upon the quality, traders said.


Average rate of onions at Lasalgaon have soared to Rs18.50 per kg from Rs13.25 per kg on 18th June, as per NHRDF.


On 17th June, the Centre had imposed an MEP of $300 per tonne on onion to curb overseas sales and control rising retail prices.


In last one month, prices have jumped by 90% to Rs18.50 per kg as against Rs9.75 per kg on 30th May.


“Onion prices have gone up purely on anticipation of drought as there has not been any decline in the supplies,” Gupta said.


About 39 lakh tonnes of rabi onion is stored in the country but that may not be sufficient if kharif crop gets affected on account of deficient monsoon, he added.


The Met department has predicted a below normal monsoon this year, posing threat to kharif crops including rice.


Monsoon rains are key for the farm sector as about 40% of agriculture land is irrigated through rain water.


The domestic demand during the lean period from June to November is met through stored rabi (winter) crops and fresh kharif (summer) crops.


Onion production is estimated to have risen to 192 lakh tonne during 2013-14 crop year (July-June), from 168 lakh tonne in 2012-13. Exports meanwhile fell to 13.58 lakh tonnes last fiscal from 18.22 lakh tonnes in 2012-13.


Onion is predominantly a rabi crop grown throughout India.


During the kharif season it is grown mainly in Maharashtra, Karnataka, Gujarat and Andhra Pradesh.


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