Nifty will be headed lower, if its closes below 7,850
We have been mentioning for the past two days that the indices would pause and move sideways. This is exactly what happened. Although the Indian market made the highest ever opening Wednesday it soon lost steam and plunged in the negative. It continued to trade there with unsuccessful attempts to turn positive. Today, for the first time after six days of consecutive positive trading, the market closed in the negative.
S&P BSE Sensex opened at 26,496 and immediately hit its intra-day high at 26,505 while NSE's CNX Nifty opened at 7,916 and hit its high at 7,923. Both Sensex and Nifty moved lower to hit the day’s low at 26,278 and 7,864, respectively. Sensex closed at 26,314 (down 106 points or 0.40%) while Nifty closed at 7,875 (down 22 points or 0.28%). NSE recorded a volume of 82.51 crore shares. India VIX fell 1.76% to close at 13.6600.
According to the recent report from ratings agency ICRA, Indian pharma companies would continue to experience strong growth in the US over the medium-term. This growth will be driven by the sizeable generic opportunity over the next 2-3 years and strong product pipeline of pending ANDAs. The report also mentions that acquisitions by Indian companies to gain technological capabilities and focus on strengthening branded business are also likely to drive growth going forward. Sun Pharma, Ranbaxy, Cipla and Aurobindo Pharma, which made to the top six gainers in the ‘A’ group on the BSE hit their 52-week high today. Sun Pharma, Cipla and Dr Reddy were among the top three gainers in Sensex 30 pack.
Dena Bank, which was named in a fixed deposit scam clarified that it has lodged a complaint in this regard with CBI. It has also suspended the erring branch manager and transferred the staff of the concerned branch. It was the top loser (5.06%) in the ‘A’ group on the BSE.
Bhushan Steel (-4.97%) which has continued hitting its new 52-week low today, also has been looking at options to reduce debt. The lenders, which met on Monday has asked the steelmaker to sell and lease back some of its critical assets to reduce debt, as the borrower is finding it difficult to raise equity from the market. It was among the top two losers in ‘A’ group on the BSE.
The oil ministry has told the Delhi high court that allegations levelled against it by Oil and Natural Gas Company (ONGC), were "frivolous" and the government had taken all necessary steps to resolve its complaint charging Reliance Industries with siphoning gas from its blocks in the Andhra offshore field. ONGC was the top loser (2.62%) in Sensex 30 stock.
US indices closed Tuesday in the positive.
Housing starts posted their strongest rebound in eight months in July, topping expectations and adding another data point to suggest optimism is returning among homebuilders.
The minutes from the last Federal Open Market Committee meeting will be released later in the day.
Except for Shanghai Composite (0.23%) all the other Asian indices closed in the positive. NZSE 50 (0.51%) was the top gainer.
European indices were trading in the negative while US Futures were trading flat.
The Bank of England in its minutes from August policy meeting published in London said the policy makers were split on rate increase.
Nifty may give up some gains over the next few sessions
Today after opening in a highly upbeat mood, the indices soon started moving lower. This was followed by the indices moving in a narrow range for the remaining session. Positive data from the US and UK helped the positive momentum on the benchmark to continue.
S&P BSE Sensex opened at 26,483 and immediately hit its life time high at 26,531 while the CNX Nifty opened at 7,901 and hit its all-time high at 7,919. Both the indices hit its daily low at 26,388 and 7,881. The benchmark today again managed to close at its new all-time high at 26,421 (up 30 points or 0.11%) and 7,898 (up 23 points or 0.30%). The NSE recorded a volume of 89.28 crore shares. India VIX rose 2.98% to close at 13.9050.
Except for Service (0.06%), Finance (0.18%) and IT (0.51%) all other indices on the NSE closed in the positive. The top five gainers were Auto (2.46%), Realty (1.57%), Smallcap (1.42%), PSE (1.15%) and Consumption (1.13%).
Of the 50 stocks on the Nifty, 37 ended in the green. The top five gainers were BPCL (3.93%), M&M (3.77%), Tata Motors (3.33%), Bajaj Auto (3.30%) and IndusInd Bank (3.23%). The top five losers were HDFC (2.49%), TCS (1.99%), Hindalco (1.02%), Sun Pharma (1.00%) and HDFC Bank (0.99%).
Of the 1,600 companies on the NSE, 933 companies closed in the green, 600 companies closed in the red while 67 companies closed flat.
On Monday, India said that it would not attend talks involving the foreign secretaries of the two countries, which were set to take place on 25 August 2014, in Islamabad, because Pakistan consulted Kashmiri separatists ahead of the meeting.
Muthoot Finance (9.65%) was the top gainer in the ‘A’ group on the BSE. It has come out with a public issue of secured NCDs and unsecured NCDs aggregating upto Rs200 crore, with an option to retain over-subscription upto Rs200 crore for issuance of additional secured NCDs and unsecured NCDs, aggregating to a total of upto Rs400 crore. Out of the funds raised, 75% will be utilised for the purpose of lending, while 25% will be used for general corporate purposes. The issue opened on August 18 and is scheduled to close on 18 September 2014.
Hitting its 52-week low today again, Bhushan Steel (4.98%) was among the top two losers in the ‘A’ group on the BSE. Bhushan’s managing director and promoter Neeraj Singhal was arrested in the Syndicate Bank bribery case last week. Lenders were scheduled to meet on Monday to look at various options to reduce the debt service burden.
Today Mahindra & Mahindra hit its 52-week high and closed 3.67% higher. It was the top gainer in the Sensex 30 pack. M&M had recently announced that as part of aligning its production with sales requirements, it would be observing no production days at its automotive plants for upto four days during the remaining period of August 2014. One of its wholly owned subsidiaries viz., Mahindra Vehicle Manufacturers Limited Plant at Chakan would also be observing no production days for upto four days during the remaining period of August 2014. The management does not envisage any adverse impact on the availability of vehicles in the market as the company has adequate vehicle stocks to serve the market requirements.
HDFC which hit its 52-week high on 14 August 2014 was the top loser (2.48%) in the Sensex 30 stock today.
US indices closed sharply higher on Monday. US homebuilder sentiment rose in August to its highest since January, the National Association of Home Builders said on Monday, marking a third straight monthly gain.
The minutes from the last Federal Open Market Committee meeting will be released tomorrow.
All the Asian indices which were trading today closed in the green. Taiwan Weighted (1.12%) was the top gainer.
European indices were trading in the green. US Futures too were trading higher.
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