Market awaits fresh domestic cues
Recouping from the day’s lows following no change in interest rates by the RBI in its quarterly policy review, the indices marched ahead in the post-noon trade to close in the positive for the third day in a row. Nifty touched a high of 5,235 almost near the day’s high. The benchmark may now see a day of gains after which the market may correct. The National Stock Exchange (NSE) saw a higher volume of 60.95 crore shares.
The market opened marginally higher as cautiousness prevailed ahead of Reserve Bank of India’s (RBI) quarterly policy review. On the global front, the Asian pack was in the green in morning trade in anticipation of announcements of fresh stimulus from the US Federal Reserve and the European Central Bank, which are set to hold their policy meetings this week.
The Nifty opened 15 points higher at 5,215 and the Sensex added 43 points to start off trade at 17,187. Healthcare, banking and consumer durables stocks supported early gains. However, the indices could not sustain their early gains and were seen gradually slipping lower in subsequent trade.
While profit booking after two days of gains saw the market dip into the red, feeble attempts to emerge into the positive were thwarted by sellers. The RBI’s move to keep key rates unchanged in quarterly policy review pushed the benchmarks into the red.
For the second time in a row, RBI governor D Subbarao on Tuesday left the key interest rate unchanged to fight inflation, and lowered the growth projection for the current fiscal to 6.5%.
However, he brought down the Statutory Liquidity Ratio (SLR)—the amount of deposits banks park in government bonds—by 1% to 23%, effective 11th August. The repo rate, at which banks borrow from RBI, has been retained at 8% and the Cash Reserve Ratio (CRR)—the amount of deposits banks keep with RBI in cash—has also been retained at 4.75%.
Selling pressure in rate-sensitive sectors like banking, auto and realty following a status quo by the central bank pushed the market to the day’s low in the pre-noon session. At the lows, the Nifty touched 5,154 and the Sensex retracted to 17,004.
However, brushing aside the RBI’s policy move, the market once again began their steady climb upwards. A positive sentiment in the US stock futures ahead of the two-day meeting of the Federal Reserve and the key European markets trading mixed supported the gains back home.
The market extended its gains and hit its intraday high in the last half hour of trade. At the highs, the Nifty rose to 5,235 and the Sensex crossed the psychological level of 17,200 and was seen at 17,254.
The benchmarks closed marginally off the highs. The Nifty finished trade at 5,229, up 29 points (0.56%) and the Sensex gained 93 points (0.54%) to close at 17,236.
Meanwhile, for the month of July the Nifty declined 0.95% or 50 points and the Sensex lost 194 points or 1.11%.
The advance-decline ratio on the NSE was 868:757.
Among the broader indices, the BSE Mid-cap index gained 0.58% and the BSE Small-cap index rose 0.13%.
The top sectoral gainers were BSE Oil & Gas (up 1.80%); BSE Realty (up 1.17%); BSE IT (up 0.78%); BSE Healthcare (up 0.69%) and BSE Metal (up 0.68%). BSE Consumer Durables (down 1.84%); BSE Bankex (down 0.28%) and BSE Power (down 0.20%) made up the losers list.
ONGC (up 3.34%); Sterlite Industries (up 2.64%); Tata Motors (up 1.925); Reliance Industries (up 1.86%) and Wipro (up 1.71%) were the Sensex leaders. The top losers were Bharti Airtel (down 2.77%); State Bank of India (down 1.27%); Hero MotoCorp (down 1.24%); Jindal Steel (down 1.02%) and Dr Reddy’s Laboratories (down 0.69%).
The top two A Group gainers on the BSE were—Essar Oil (up 10.21%) and Manappuram Finance (up 9.24%).
The top two A Group losers on the BSE were—Titan Industries (down 4.24%) and Suzlon Energy (down 3.40%).
The top two B Group gainers on the BSE were—Spectacle Infotek (up 19.94%) and SMS Pharmaceuticals (up 18.23%).
The top two B Group losers on the BSE were—Golden Securities (down 19.89%) and Jai Mata Glass (down 12.50%).
The top gainers on the Nifty were Grasim Industries (up 3.96%); ONGC (up 3.83%); DLF (up 3.62%); Sterlite Industries (up 3.17%) and ACC (up 2.61%). The main losers were Bharti Airtel (down 2.70%); Bank of Baroda (down 2.65%); Hero MotoCorp (down 1.30%); Jindal Steel (down 1.21%) and Reliance Infrastructure (down 1.18%).
Markets in Asia closed mostly higher in anticipation of new measures to boost growth by central banks in the US and Europe. Positive news from corporates in the region also boosted the sentiment.
The Hang Seng climbed 1.08%; the Jakarta Composite surged 1.05%; the Nikkei 225 gained 0.69%; the Straits Times rose 0.12%; the Seoul Composite jumped 2.07% and the Taiwan Weighted advanced 1.56%. On the other hand, the Shanghai Composite fell 0.30% and the KLSE Composite lost 0.05%.
At the time of writing, the CAC 40 of France was trading 0.08% higher, the German DAX was up by 0.51% and UK’s FTE 100 was 0.18% lower and the US stock futures were in the positive, ahead of the start of the two-day FOMC meet.
Back home, foreign institutional investors were net buyers of equities aggregating Rs928.95 crore on Monday while domestic institutional investors were net sellers of shares totalling Rs233.71 crore.
With more and more consumer goods companies rushing to tap the rural markets, Godrej Consumer Products (GCPL) has warned that rising cost of living may lead to a decline in rural sales in the short-term. “The rise in overall cost of living and concerns over decrease in social spending may have some impact on growth in rural FMCG sales in the short-run,” GCPL chairman Adi Godrej said in the company’s annual report. The stock closed 0.65% lower at Rs626.50 on the NSE.
NDTV has sued the global TV rating agency Nielsen for billions of dollars for allegedly manipulating viewership data, according to a media report. In a 194-page lawsuit filed in a New York court late last week, NDTV accused Nielsen of violating the Foreign Corrupt Practices Act by manipulating viewership data in favour of channels that are willing to provide bribes to its officials. The stock jumped 5.20% to close at Rs53.60 on the NSE.
Sonata Software, IT consulting and software services provider has decided to set up an Offshore Development Centre (ODC) for US based Coalfire Systems, a leader in IT Governance, Risk, and Compliance (IT GRC). The dedicated ODC will architect and develop Coalfire’s new generation compliance management solution, the Navis platform. The deal is envisaged as a long term engagement, where Sonata will develop and support the continuously evolving platform as Coalfire adds functionality to address needs of newer segments of the market. The stock ended 0.28% higher at Rs17.85 on the NSE.