Nifty may be headed for 7,700
We had mentioned in last week’s closing report that Nifty, Sensex were in an uptrend and that Nifty would weaken on a close below 7,400. In spite of a rally on Thursday and Friday, the major indices closed with a small weekly loss over last week’s close. The trends of the major indices of the Indian equity markets during the week’s trading are given in the table below:
In anticipation of the Reserve Bank of India’s (RBI) monetary policy review, the major indices ended flat on Monday and closed with marginal losses.
India's second largest carmaker Hyundai Motor India Ltd. on Monday said its total sales last month, including exports, went down marginally by 1.2%. In a statement here, the company said it sold 44,230 units (domestic 38,016 units, exports 6,214 units) last month -- down from 44,783 units (domestic 34,780 units, exports 10,003 units) sold during January 2015. "Hyundai started the year with a positive note registering the domestic volume of 38,016 units with a growth of 9.3% over last year," Rakesh Srivastava, senior vice president -- sales and marketing, was quoted as saying in the statement.
On Monday, sales Eicher Motors announced that sales zoomed 65% last month year-on-year. In a statement the company said it sold 47,710 units last month (domestic 47,140 units, exports 570 units) as against 28,927 units (domestic 28,157 units, exports 770 units) sold during January 2015. Eicher Motors' Royal Enfield division rolls out heavy two-wheelers. The company unveiled in New Delhi on Tuesday a new motorcycle, Himalayan, powered by an all new LS410 engine. Eicher Motors shares closed up 9.56% over the week.
On Tuesday, the RBI, in its last bi-monthly credit policy review for FY2015-16 kept repo, reverse repo, cash reserve ratio (CRR) and bank rate unchanged. With repo rate remaining at 6.75%, the reverse repo rate under the liquidity adjustment facility (LAF) will remain unchanged at 5.75%, and the marginal standing facility (MSF) rate and the bank rate at 7.75%. In a statement, RBI Governor Dr Raghuram Rajan said, "The Reserve Bank continues to be accommodative even as it leaves the policy rate unchanged in this review, while awaiting further data on the development of inflation. Structural reforms in the forthcoming Union Budget that boost growth while controlling spending will create more space for monetary policy to support growth, while also ensuring that inflation remains on the projected path of 5% by the end of 2016-17."
On Tuesday, the industrial output index for India's eight core industries registered a rise in December 2015, pushed up by higher coal, refinery products, fertilizers, cement and electricity output. The index representing major infrastructure sectors had recorded a fall in November 2015. The index showed a rise of 0.9% in December 2015 on a month-on-month basis, compared to the 1.3% decline in November, official data showed on Monday. The core industries grew 3.2% in October last year. However the select factory output index for December is less than the growth of 3.2% achieved during the corresponding month in 2014, a commerce ministry release said. This index comprises 38% of the total weightage of items included in the Index of Industrial Production (IIP). Its cumulative growth from April to December 2015-16 stood at 1.9%, as compared to 5.7% during the corresponding period of 2014-15. Out of the eight core industries, fertilizers and coal reported healthy output numbers. However, production of oil, natural gas, and steel dwindled in the period under review.
Major indices in the Indian stock markets suffered a sharp correction again on Wednesday with losses in the range of 1.26%-1.55% over Tuesday’s close. Aluminium producer National Aluminium Company Ltd (Nalco) on Wednesday said it has developed a new corporate plan under a new business model to withstand market onslaughts and keep the company afloat with profitability.
Global software major Wipro Ltd. will hire 25,000 more techies in Karnataka, especially Bengaluru, its chairman Azim Premji said on Wednesday. "We will add 25,000 more IT jobs in Karnataka where we already employ over 55,000 people and are expanding each of our businesses," Premji said at the state's global investors meet (GIM) in Karnataka on Wednesday.
On Thursday, the major indices of the Indian stock markets rallied after three days of losses and closed with small gains over Wednesday’s close. The National Association of Software and Services Companies (Nasscom) on Thursday revised the growth forecast for the software services sector to between 10%-12% for the financial year 2015-16, a statement said. The exports revenue of the industry grew by 12.3% and domestic revenue grew by 10% in 2015-16. The earlier growth projection by the IT software industry body for the present financial year was in the tune of 12%-14%. “Amidst a growth of 0.4% in the global IT-BPM in 2015, the industry is expected to reach an estimated $143 billion in FY2016, doubling its revenue over the last six years and crossing the $100 billion milestone in export revenues,” the statement said.
On Friday, key Indian equity indices opened marginally higher, even as Asia-Pacific shares lost ground but closed with gains of around 1% over Thursday’s close. Following the market correction in the early part of the week, the major indices are now in an uptrend.
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were: