Sensex, Nifty may move up further: Wednesday closing report

Nifty may continue to rally if it manages to keep itself above 6,280

On Tuesday we mentioned that both BSE Sensex and NSE Nifty may try to move up again though Nifty’s resistance at 6,300-6,315 is quite strong. On Wednesday, Nifty hit this resistance in the morning, went down sharply and then rallied again to cross this resistance. The market has some more steam left as long as Nifty stays above 6,280.


A strong rally in the US on Tuesday and Asian markets today, plus World Bank raising its global growth forecasts puts the bulls back in saddle. The Sensex closed at it highest since 9 December 2013 while the Nifty closed at its highest since 10 December 2013. The Sensex opened at 21,091 hitting its intra day low almost at the same level. It reached 21,303 and closed at 21,289 (up 257 points or 1.22%) while the Nifty opened at 6,266 and hit a low of 6,265. The Nifty moved up to hit the high of 6,325 and closed at 6,321 (up 79 points or 1.27%). The NSE recorded a higher volume of 59.43 crore shares.


Except for Media (down 0.42%) all the other indices on the NSE closed in the positive. The top five gainers were PSU Bank (1.88%); Finance (1.84%); Bank Nifty (1.61%); Infra (1.54%) and Dividend Opportunities (1.36%).


Of the 50 stocks on the Nifty, 45 ended in the green. The top five gainers were UltraTech Cement (3.76%); Bank of Baroda (3.63%); Sesa Sterlite (2.96%); N M D C (2.78%) and PNB (2.64%). The only five losers were Ranbaxy (2.30%); Cairn (1.35%); Lupin (0.70%); B P C L (0.29%) and Sun Pharma (0.27%).


Of the 1,510 companies on the NSE, 751 companies closed in the positive, 675 companies closed in the negative, 84 companies closed flat.


The wholesale price index climbed an annual 6.16% last month, its slowest pace since July 2013. The pace of gains in December was tempered by a softening in vegetable prices that fell nearly 30% from November, bringing down overall food inflation for the month to 13.68% from 19.93% a month ago.


India's fiscal deficit will be contained at 4.8% of the gross domestic product (GDP) in the current fiscal year ending March, the finance minister P Chidambaram  said, hinting at possible cuts in government spending. The US indices closed in the positive. US retail sales increased 0.2% after a 0.4% advance in November that was smaller than previously reported, Commerce Department figures showed in Washington.


The World Bank raised its global growth forecasts as the easing of austerity policies in advanced economies supports their recovery, boosting prospects for developing markets' exports. The bank sees the world economy expanding 3.2% this year, compared with a June projection of 3% and up from 2.4% in 2013. The forecast for the richest nations was raised to 2.2% from 2%. Part of the increase reflects improvement in the 18-country euro area, with the US ahead of developed peers, growing twice as fast as Japan. At the same time, the withdrawal of monetary stimulus in the US may raise market interest rates, hurting poorer countries as investors return to assets such as Treasuries, according to the bank.


Except for Shanghai Composite (down 0.17%) and KLSE Composite (down 0.60%) all the other Asian indices closed in the positive. Nikkei 225 (up 2.50%) was the top gainer.


European indices were trading in the green while the US Futures too were trading higher.


Bajaj Finance Q3 net profit up 21% on higher interest income

Bajaj Finance reported a 21% increase in its net profit during the December quarter on 33% growth in its net interest income

Bajaj Finance Ltd, the largest financier of two wheelers and consumer durables as well as third largest non banking financial corporation (NBFC) in India, reported a 21% increase in its net profit during the third quarter due to robust growth in its net-interest income (NII).

For the quarter to end-December, Bajaj Finance net profit increased 21% to Rs194 crore from Rs160 crore while total revenues, including NII, rose 31% to Rs1,082 crore from Rs828 crore same period last year. Likewise, its operating income increased 30% to Rs43 crore, compared with Rs33 crore compared with a year ago period.

During the quarter, its NII increased 33% to Rs672 crore from Rs507 crore due to 15% increase in number of customers. As on 31 December 2013, Bajaj Finance had 9.62 lakh customers.

Bajaj Finance’s gross non-performing assets (GNPA), during the third quarter, stood at 1.15% and net non-performing assets (NNPA) at 0.23%. Its capital adequacy ratio (CAR) stood at 19.53% and provisional coverage ratio stood at 80% as of 31 December 2013.


Driven by healthy inflows, the Bajaj group company’s total asset under management (AUM) increased 33% at Rs22,461 crore for the quarter ended December 2013, compared with Rs16,844 crore for the same period last year.

On Wednesday, Bajaj Finance closed flat at Rs1,548 on BSE, while the benchmark Sensex ended 1.12% up at 21,289.


Inflation softens to 6.16% on lower food prices

Inflation based on WPI declined to 6.16%, the lowest since July 2013 raising hopes of a rate cut by RBI later this month

A moderation in vegetable prices helped to pull down inflation to a five-month low of 6.16% in December. This raises hopes of a rate cut by the Reserve Bank of India (RBI) later this month to boost sagging growth.


This is the slowest pace of price rise, as measured by the wholesale price index (WPI), since July 2013, when inflation was 5.8%. In November, wholesale price inflation increased at the fastest pace in 14 months at 7.52%.


The moderation in December WPI figures comes on the back of easing prices of essential food items, including vegetables, cereals and protein-rich items.


According to official data, inflation in food articles, which has a 14.34% share in the WPI basket, was 13.68% in December. It was 19.93% in November.


During the month, inflation in vegetables declined to 57.33% from 95.25% in November. This was driven by onion prices, which gained 39.56% compared with a 190.34% rise in November.


However, the rate at which potato prices rose was more than double at 54.65% in December over November.


Inflation in fruits and protein-rich items such as eggs, meat and fish stood at 9.07% and 11.40%, respectively. In milk, inflation increased to 6.93%.


With inflation declining, industry has clamoured for a reduction in interest rates. However, some experts said the central bank may keep rates on hold at its quarterly monetary policy scheduled on January 28.


Industry chambers have pitched for lower interest rates to prop up growth. Industrial output in November contracted 2.1%, the worst performance in six months. "The easing of inflation at a time when industrial growth continues to be in the red should induce RBI to review its monetary policy stance and cut its policy rates to rejuvenate growth, which has been hit by high interest costs, flagging investments and subdued demand," Chandrajit Banerjee, director general of Confederation of Indian Industry (CII) said.


October inflation was revised upward to 7.24% from 7% earlier.


The RBI kept key policy rates unchanged last month on expectations that wholesale and retail inflation would ease.


The central bank had increased the key policy rate (repo) twice between September and November to check inflation. The repot rate at present is 7.75%.


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