Sensex, Nifty possibly headed lower: Weekly market report

A possible midweek bounce may indicate the extent of the decline

The BSE Sensex closed at 21,133.56 (up 70 points or 0.33%) while the NSE Nifty closed at 6,266.75 (up 5 points or 0.08%).


Last week, we mentioned that the market looks weak and for the rally to resume the Nifty should close above 6,300.


After a weak closing on last Friday, the market opened in the positive and remained up for almost the entire session on Monday. The move on the bourses happened after the prime ministerial candidate Narendra Modi's speech on Sunday wherein he said the emphasis will be on urbanisation, infrastructure and inflation control. On the other hand the Congress-led government in Maharashtra decided to reduce 15% to 20% cut in power tariff charged to domestic consumers, industries and powerlooms. Nifty closed at 6,304 (up 42 points or 0.68%).


On Tuesday the Nifty closed at 6,314 (up 10 points or 0.16%). There were no market triggers except for the news from China where The People’s Bank of China added funds to large commercial banks using its Standing Lending Facility and conducted 255 billion yuan of reverse-repurchase agreements.


A Reserve Bank of India panel has recommended that the central bank should start using a consumer-price inflation target to determine monetary policy. On the other hand the finance minister P Chidambaram said India is better prepared US Federal Reserve's winding down of its stimulus. Nifty closed at 6,339 (up 25 points or 0.40%) on Wednesday.


The International Monetary Fund, raised its forecast for global growth this year as expansions in the US and UK accelerate, and urged advanced economies to maintain monetary accommodation to strengthen the recovery. While it raised the outlook for advanced nations, the IMF said "downside risks remain," including financial-market volatility in emerging markets.


On Thursday the market continued with its struggle to keep the positive trend. Nifty closed at 6,346 (up 7 points or 0.11%).There were news that the Congress party chief Sonia Gandhi has written to the government, to ask for a cut in the record import duty on gold and for other restrictions to be eased. On the other hand, Planning Commission Deputy Chairman Montek Singh Ahluwalia said that India has the potential to grow over 6% and even 7.5% in the long term.


On Friday, Nifty wiped off almost all the gains made in the past four trading days. The market sentiment was hit adversely by Reserve Bank of India  governor Raghuram Rajan's comments on Thursday that inflation is a “destructive disease” that is the cause of high interest rates. Nifty closed at 6,267 (down 79 points or 1.24%).


For the week, among the other indices on the NSE, the top two performers were IT (1%) and Service (1%) while the worst two performers were PSU Bank (2%) and Dividend Opportunities (2%).


Among the Nifty stocks, the top five stocks for the week were Axis Bank (4%); Wipro (4%); Hindalco Industries (2%); HCL Technologies (2%) and ICICI Bank (2%) while the top five losers were Ranbaxy (17%); Kotak Mahindra Bank (6%); Coal India (5%); Ambuja Cements (4%) and Bank of Baroda (4%).


Of the 1,364 companies on the NSE, 511 companies closed in the green, 808 companies closed in the red while 45 companies closed flat.


Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:


Top ML sector


Worst ML sector


Lifestyle & Leisure


Foods & Beverages


Software & IT Services




Non-Ferrous Metals




Telecom Services


Real Estate








Sensex, Nifty may have started a downtrend: Friday closing report

Nifty will be headed lower unless it closes above 6,300 on Monday

Today’s plunge in the Nifty wiped off almost all the gains made in the past four trading days. The market sentiment was hit adversely by Reserve Bank of India (RBI) governor Raghuram Rajan's comments on Thursday that inflation is a “destructive disease” that is the cause of high interest rates.


The Sensex and the Nifty opened today in the negative and continues to move down. The Sensex opened at 21,289 and immediately after hitting a high of 21,334 the index side down to hit a low of 21,124 and almost at the same level at 21,134 (down 240 points or 1.12%). The Nifty opened at 6,302 and went to hit a low of 6,264 after hitting a high of 6,331. The index closed at 6,267 (down 79 points or 1.24%). The NSE recorded a volume of 51.62 crore shares.


"Industrialists complain about high interest rates but we don't have a choice but to keep interest at a high rate because inflation is high at 8%", Rajan said. The strong warning against inflation comes ahead of the central bank's policy review early next week.


A Reserve Bank of India panel earlier this week recommended making inflation the “predominant objective” of monetary policy. The finance minister Palaniappan Chidambaram said the central bank must keep the objective of supporting growth. Differing opinions over how best to tackle Asia’s fastest inflation signal a lengthy debate that won’t be settled soon.


India is not planning any changes to its record import duty on gold and other restrictions on imports until the current account deficit is firmly under control, the finance minister told a television channel.


US indices closed in the negative on Thursday.


The US flash purchasing managers index slipped to 53.7 in January, down from December's level of 55, which was an 11-month high. This is the slowest improvement in conditions since October. US initial jobless claims rose slightly to 326,000 last week. The leading economic index rose 0.1% in December, marking its sixth gain in a row, the nonprofit Conference Board said Thursday. In the housing sector, sales of existing homes rose 1% in December to a 4.98 million annual rate, while the median sale price climbed 9.9% to $198,000.


Except for Shanghai Composite (up 0.60%) and Taiwan Weighted (up 0.04%) all the other Asian indices closed in the red. Nikkei 225 was the top loser which fell 1.94%.


European indices were trading in the red.  


Fitch Ratings today affirmed Germany's credit rating at AAA with a stable outlook, citing a decline in the debt level of Europe's biggest economy. “Germany continues to have the components of a declining public debt path,” Fitch said in a statement. “The economy is growing, the budget position is relatively favorable and nominal interest rates are low.”


US Futures too were trading lower.


Ranbaxy plunges 20% as US FDA bans imports from its Toansa plant

Ranbaxy Laboratories shares plunged nearly 20% on Friday after US FDA banned drug imports from its Toansa plant in Punjab

Ranbaxy Laboratories (Ranbaxy) shares prices plunged 20% on Friday and hit an intra-day low of Rs334, after confirmation the US Food and Drug Administration (USFDA) banned supplies from Ranbaxy’s Toansa plant in Punjab.

Ranbaxy in its press release said, “US FDA notified the company that, it is prohibited from manufacturing and distributing active pharmaceutical ingredients (APIs) from its facility in Toansa, India, for FDA-regulated drug products.”

Earlier on 11 January 2014, US FDA identified significant current good manufacturing practice (CGMP) violations at Ranbaxy’s Toansa plant. Violations included Toansa staff re-testing raw materials, intermediate drug products, and finished API after those items failed analytical testing and specifications, in order to produce acceptable findings, and subsequently not reporting or investigating these failures.

As a result of this action, Ranbaxy is now prohibited from manufacturing API for FDA-regulated drugs at the Toansa facility and from introducing API from that facility into interstate commerce, including into the United States, until the firm’s methods and controls used to manufacture drugs at the Toansa facility are established, operated and administered in compliance with CGMP.

“This development is clearly unacceptable and an appropriate management action will be taken upon completion of the internal investigation,” said Arun Sawhney, chief executive officer and managing director of Ranbaxy Laboratories.

Ranbaxy said in its press release that, it had voluntarily and proactively suspended shipments of API from this facility to the US market when it received the inspection findings during first week of January 2014. It also stated: “Ranbaxy is disappointed with the recent FDA action and would like to apologise to all its stakeholders for the inconvenience caused by the suspension of shipment.”

Ranbaxy has had a history of procedural violations in its plants. Earlier in May 2013, Ranbaxy the unit of Japanese Daiichi Sankyo, paid $500 million to settle similar charges relate with manufacture and distribution of certain adulterated drugs made at Paonta Sahib and Dewas in India.

Again shortly after, in July 2013, Ranbaxy Laboratories has agreed to pay about $420,000 to settle civil and criminal complaints of selling drugs of inferior strength, purity or quality Idaho state in north-western US.

US FDA in a statement said that, the agency is evaluating potential drug shortage issues that may result from this action. If the FDA determines that a medically necessary drug is in shortage or at risk of shortage, the FDA may modify this order to preserve patient access to drugs manufactured under controls that are sufficient to assure quality, safety and effectiveness.

On Friday, Ranbaxy Laboratories closed 19.54% down at Rs335.65 while 30-share benchmark Sensex closed 240 points down at 21,133.

You may like to read more about it,

Ranbaxy pleads guilty to felony charges; to pay $500 million in US lawsuit settlement

Ranbaxy to pay further $420,000 in US for selling sub-standard medicines

Making a smart choice: Thin line between compliance and collusion

EU regulator fines Ranbaxy, 8 others over Citalopram generic delay

US FDA to increase inspections of drug facilities in India


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