Nifty will have made a temporary bottom, only if it closes above 8,430
We had mentioned in Wednesday’s closing report that while the market indices may put in a short bounce, the trend is lower. On Thursday, the indices in the Indian stock market improved and managed to close marginally higher, encouraged by positive macroeconomic government data. With the boost in market sentiment, the market is likely to hold, rather than suffer a sharp decline.
The Indian equity markets closed flat on Thursday, as the initial gains made on the back of positive macro-economic data diminished on account of the government's inability to pass key economic legislations on the last day of the monsoon session on Thursday.
Nevertheless, after three days of continued losses this week, the barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) closed 37 points up. The index had lost a total of 724 points during the first three trading days of the week.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also gained marginally -- by 6.40 points or 0.08 percent at 8,355.85 points.
Investors were seen hopeful of a rate-cut based on healthy macro-economic data points which were released late on Wednesday.
The macro-economic data points showed a fall in India's annual retail inflation rate to 3.78 percent in July and a rise in the factory output to 3.8 percent in June.
The market rallied in the morning and was up 279 points at one point during the day. The initial gains receded as negative cues such as the impasse over GST (goods and services tax) bill, and devaluation of the Chinese yuan coupled with a depreciating rupee impacted investor sentiments.
On the global front, the devaluation of the yuan just before the US Fed's monetary policy decision impacted the Indian rupee which fell to a 24-month-low at Rs.65.23 to a dollar.
On the bright side of the volatile day's trade, the possibility that the government might extend the "Monsoon Session" or call for a "Special Session" of parliament to pass the GST bill kept investors optimistic about the future of the key economic legislation.
Lately, investors have been reluctant to chase higher prices given the possibility that the reform process might be stalled due to the government's inability to conduct business in parliament.
Sector-wise, healthy buying was observed in banks, healthcare and automobile stocks, while metal, consumer durables and technology, entertainment and media (TECK) scrip came under selling pressure.
The S&P BSE bank index increased by 140.54 points, followed by healthcare index which gained by 139.27 points and automobile index which rose 81.02 points
However, the S&P BSE metal index tanked by 217.98 points, consumer durables index declined by 109.75 points and the TECK index tripped by 35.66 points.
The top gainers and losers of the major indices are given in the table below:
Among the Asian markets, Japan's Nikkei was up 0.99 percent, Hong Kong's Hang Seng gained by 0.43 percent, and China's Shanghai Composite Index rose by 1.76 percent.
The closing values of the major Asian indices are given in the table below: