Sensex, Nifty may see some more gain: Wednesday Closing Report

Nifty will have to make a higher low and close above today’s high for the gains to continue

The market snapped its five-day losing streak and closed higher on gains in technology, banking and capital goods sectors in late trade today. The Nifty will have to make a higher low and close above the day’s high to continue making gains. The National Stock Exchange (NSE) reported a volume of 59.93 crore shares and advance-decline ratio of 689:628.


The market opened in the positive on support from its Asian peers which were higher in morning trades on optimism from Japan. US markets closed marginally high on Tuesday in the absence of fresh triggers.


The Nifty opened 41 points higher at 5,536 and the Sensex started off at 18,355, rising 129 points over its previous close. Buying in realty, technology and banking sectors aided the initial gains.


The benchmarks pared some of those gains and were seen hovering near their previous closing levels for the entire first half of trade. Selling in auto stocks on the back of the 23% decline in domestic passenger car sales in March 2013 pushed the indices in the negative to the day’s lows in noon trade. The Nifty fell to 5,477 and the Sensex slipped to 18,173 at their respective lows.


The market soon recovered from its lows on buying in banking and IT stocks. A firm opening of the key European markets also supported the upmove. The indices hit their highs in the last hour with the Nifty rising to 5,569 and the Sensex climbing to 18,461.


Snapping the five-day decline, the indices closed in the positive, marginally off the highs of the day. The Nifty gained 64 points (1.16%) to 5,559 and the Sensex climbed 188 points (1.03%) to close the session at 18,414.


The broader indices underperformed the Sensex today. The BSE Mid-cap index advanced 0.53% and the BSE Small-cap index added 0.01% in trade today.


With the exception of BSE Fast Moving Consumer Goods (down 0.40%), all other sectoral indices ended higher. The top gainers were BSE TECk (up 2.10%); BSE IT (up 2.05%); BSE Bankex (up 1.73%); BSE Capital Goods (up 1.40%) and BSE Realty (up 1.30%).


Twenty-one of the 30 stocks on the Sensex closed in the positive. The chief gainers were HDFC (3.64%); Larsen & Toubro (up 2.25%); TCS (up 2.19%); Wipro (up 2.17%) and Tata Motors (up 1.86%). The top losers were Sun Pharmaceutical Industries (down 1.24%); Jindal Steel & Power (down 1.01%); ITC (down 0.91%); Hindustan Unilever (down 0.91%) and Dr Reddy’s Laboratories (down 0.55%).


The top two A Group gainers on the BSE were—Reliance Communications (up 13.49%) and J&K Bank (up 4.73%).

The top two A Group losers on the BSE were—MMTC (down 3.64%) and Mahindra & Mahindra Financial Services (down 3.08%).


The top two B Group gainers on the BSE were—Facor Steels (up 20%) and Delta Corp (up 19.84%).

The top two B Group losers on the BSE were—Megasoft (down 16.05%) and Dolat Investment (down 13.19%).


Of the 50 stocks on the Nifty, 38 ended in the green. The key gainers were Reliance Infrastructure (up 4.62%); HCL Technologies (up 3.73%); Jaiprakash Associates (up 3.67%); Axis  Bank (up 3.06%) and Kotak Mahindra Bank (up 2.95%).The major losers were Sun Pharma (down 1.45%); JSPL (down 1.37%); ITC (down 1.20%); HUL (down 1.16%) and Dr Reddy’s (down 0.86%).


Markets in Asia closed mostly higher on news that Chinese imports rose 14.1%, indicating a pick-up in demand in the Asia’s largest economy. Fitch ratings agency which cut China's long-term local currency credit rating to A-plus from AA-minus on Tuesday with a stable outlook, also weighed on investor sentiment. Meanwhile, political tensions between North and South Korea intensified further with North Korea moving ne or more long-range missiles in readiness for a possible launch.


The Shanghai Composite added 0.02%; the Hang Seng advanced 0.75%); the KLSE Composite rose 0.35%; the Nikkei 225 climbed 0.73%, the Seoul Composite surged 0.77% and the Taiwan Weighted settled 0.31% higher. On the other hand, the Jakarta Composite fell 0.45% and the Straits Times slipped 0.10%.


At the time of writing, the key European markets were up between 0.77% and 1.25% and the US stock futures were trading with modest gains.


Back home, foreign institutional investors were net sellers of shares totalling Rs64.90 crore on Tuesday while domestic institutional investors were net buyers of stocks amounting to Rs987.81 crore.


Siemens, a flagship company of Siemens AG, today said it has bagged a Rs104.4 crore contract from the Bangladesh Steels Re-Rolling Mills (BSRM) to build a gas insulated switchgear substation. The project is expected to be commissioned in 15 months. The stock rose 1.03% to close at Rs478 on the NSE.


Shasun Pharmaceuticals has entered into a licensing agreement with Switzerland- based Debiopharm for manufacturing and commercialisation of Huperzine-A, a drug used in the treatment of Alzheimer’s disease. Shasun closed 12.17% at Rs73.25 on the NSE.


Sensex at its lowest level since Chidambaram announced his reform measures last September

BSE Sensex today hit lowest levels since the finance minister announced his reform measures on the 14th September 2012. What exactly happened between September 2012 and now?

Today the Bombay Stock Exchange’s (BSE) 30-share Sensex hit a low of 18173. On 14 September 2012 when finance minister P Chidambaram announced his big bang reforms, the Sensex stood at 18,464. The reform measures included reduction in diesel subsidies, allowing foreign direct investment (FDI). These announcements were welcomed by many, including foreign institutional investors (FIIs). Believing the finance minister, they pumped in a lot of money into the markets taking it to new high in January 2013. However, since then markets have tumbled to below 14 September 2012 level, wiping out all the gains accrued since then.

Take a look at the chart below:

The BSE Sensex started at 18,464 on 14 September 2012, when P Chidambaram announced a slew of so- called economic reforms. Some of these measures include 51% foreign direct investment (FDI) in multi-brand retail, hiking diesel prices and putting a cap on the supply of subsidised LPG cylinders to households. The market obviously reacted very positively in the following months after announcement and soon breached 20,000. Some of the biggest investors were foreign institutional investors (FIIs).

Eventually, on 25 January 2013, the market reached its peak at 20,103. It had moved up 8.8% within just over four months. However, over next two and half months the markets wiped off those gains completely. The second half of the graph clearly shows this.

Just when Chidambaram introduced the slew of economic reforms, the most excited were foreign institution investors (FIIs). They played a key role in pushing the markets higher and higher by pumping in cheap foreign money. FIIs poured as much as $8.4 billion into Indian equities in the third quarter and much of it into banking and financial sectors, hoping that the reforms and low interest rates (which RBI would soon cut) would be key catalysts. Analysts from foreign investment banks were pumped up as well. For instance, leading brokerage firm Goldman Sachs pegged Indian growth to touch 6.5% in 2013 and further to 7.2% in 2014. Many foreign investors were expecting India’s economy to pick up on the back of such economic reforms.

However, at the same time, domestic institution investors (DIIs) were moving in the opposite direction. They were bearish and selling equities. Several times, they turned out to be correct, according to an analysis undertaken by Moneylife. In fact, DIIs were betting very selectively, selling as much as $3.5 billion worth of equities during the December 2012 quarter. It is not surprising because DIIs know more about Indian economy (and reform measures) than foreigners.

The BSE Sensex peaked in January in the hope that the RBI will cut rates aggressively. As inflation moderated, the Reserve Bank of India (RBI) cut rates a bit. Meanwhile, prior to the Budget, the finance minister and his entourage went on a global tour, trying to sell the India story to investors. He went to Hong Kong and Singapore to assure and pressed for the case of investing in India when he told them that India’s fiscal deficit would be brought down to 3% in 2016-17. However, the Budget proved to be a dampener and many, including FIIs and DIIs, were left disappointed. The markets crashed by more than 1.50% on the day of the budget. We had written in detail about this in the Fortnightly Column, ‘An affair to forget’.

Foreign brokers and investors were losing patience and they realized that the budget was aimed at the vast electorate instead of economic reforms. There was no mention of big reforms in the Budget as initiated earlier in September 2012. We had written a piece on this.  Soon, investment banks were trimming forecasts. Nomura cut India’s GDP forecast to 5.6% , while Moody’s has stated that if India grows over 7% without economic reforms, inflation will be a big concern.

“Some government policymakers, most notably RBI governor D Subbarao, have begun pushing for a return to double-digit growth. This is wildly optimistic and, without significant structural reform, a dangerous view to take,” Moody’s Analytics, an arm of ratings agency Moody’s, said.

Finally, once again, the Indian reality of more talk and less action, policy paralysis and deeply vested interests, asserted themselves. The market merely reflects this.  (read An India Reality)  . We are not surprised. We have pointed several times ever since the market started getting euphoric beyond a Sensex level of 19,500. (Read Reality strikes and High Risk Low Reward ) This should be an object lesson to investors who make investments decisions based on a government that cannot put through anything other than cosmetic changes.



ashwin bahl

4 years ago

Did we expect last minute miracles from PC, after sleeping for 9 years this knee jerk reforms do not instil any confidence!

Sadanand Patwardhan

4 years ago

FII are fickle minded in pursuit of lucre and don't have any stakes in local economy save except their returns. US stock markets are booming so that gives better arbitrage to FII to move funds there. Let us not waste breath on Stock prices, which have lost any connect with reality.

Please read ***Dystopia: Rise of DJIA and Greenspan's Utopia.*** at for more


Sanjay Dutt exploring option of review petition

The Supreme Court had on 21st March upheld Sanjay Dutt’s conviction under Arms Act and sentenced him to five years in jail of which he has already served 18 months

Bollywood actor Sanjay Dutt, ordered by the Supreme Court to complete his five years sentence for complicity in the 1993 Mumbai blasts, is exploring the option of filing a review petition against the judgement, sources close to him said today.


The Supreme Court had on 21st March upheld Sanjay Dutt’s conviction under Arms Act and sentenced him to five years in jail of which he has already served 18 months.


In keeping with the order to surrender within four weeks, he has to give himself up before the designated TADA court by 18th April.


The actor has the option of filing a review petition and, in the event of failing to get relief, he can file a curative petition, the sources said.


While review petition comes up before the same bench which heard his appeal against the trial court’s order sentencing him to prison, the curative petition is heard by a larger bench.


Though the actor can also seek pardon from the state governor, he has gone on record to say he would not.


Amid a growing clamour for his clemency, Sanjay Dutt, 53, had told the media on 28th March that he would not apply for pardon.


“There are many other people who deserve pardon. I want to tell with folded hands to the media, the honourable citizens of the country, that when I am not going for pardon then there can be no debate about it,” Sanjay Dutt, who repeatedly broke down during his interaction with the press, said.


Governor K Sankaranarayanan had earlier this month sent over 60 representations and petitions received by him from various individuals and organisations, both seeking and opposing clemency for Dutt, to the state home department.


These petitions included those from PCI chief Markandey Katju and expelled Samajwadi Party leader Amar Singh.


Meanwhile, racing against time, the actor has set up a dubbing studio at his home and is trying to finish all pending projects.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)