If the lows of the last two days hold, we may witness a short rally
We had mentioned in Tuesday’s closing report that NSE’s CNX Nifty may be headed lower. We had also mentioned that Nifty has to head above 8,760 for the first sign that the current decline is arrested. On Wednesday, the 50-share index reached almost this level (8,755) but made a quick decline to hit the day’s low, before closing in the negative for the third consecutive session.
S&P BSE Sensex opened at 28,726 while Nifty opened at 8,729. Sensex moved to the low of 28,608 after reaching the high of 28,843 while Nifty moved from the high of 8,756 to the low of 8,682. Sensex closed at 28,659 (down 51 points or 0.18%) and Nifty closed at 8,700 (down 12 points or 0.14%). Bank Nifty opened higher at 19,050 however soon moved lower to the level of 18,918. From the low it tried moving higher which resulted in the index reaching up to 19,182. However it gave up all the intra-day gains and closed marginally lower at 19,044 (down 10 points or 0.05%). NSE recorded a volume of 89.02 crore shares. India VIX fell 2.59% to close at 15.1300.
The Indian government will unveil industrial production data for January 2015 on Thursday. The preliminary data on India's balance of payments released by the Reserve Bank of India (RBI) after trading hours Tuesday showed that the country's current account deficit (CAD) narrowed to $8.2 billion or 1.6% GDP in Q3 (December 2014) from $10.1 billion or 2% of GDP in September quarter. However, on a year-on-year basis, the CAD rose sharply from $4.2 billion or 0.9% of GDP in Q3 December 2013.
The government on Tuesday managed to push through the contentious land acquisition bill in the Lok Sabha. The bill will now be taken up for a vote in Rajya Sabha where the government is in minority.
Life Insurance Corporation (LIC) has signed a MoU with the Railway Ministry under which the insurer will invest Rs1.5 lakh crore in infrastructure projects over the next five years. The investment of Rs30,000 crore annually, would be made through bonds issued by Indian Railways Finance Corp to raise funding for development of commercially viable projects.
There is news that a demand to regulate fares charged by airlines was made in Rajya Sabha.
Coming back to Indian stock markets, Natco Pharma (9.09%) was the top gainer in ‘A’ group on the BSE. The stock hit its 52-week high today. The US Supreme Court has denied certiorari for the generic version of Tamiflu (oseltamivir phosphate) oral capsules. Natco Pharma has partnered with Alvogen in the USA for marketing of this product. PMC Fincorp (9.93%) was the top loser in ‘A’ group on the BSE.
The bidding intensity in the ongoing spectrum auction has subsided a bit. The government has garnered Rs94,000 crore worth of bids from telecom players at the end of five days of spectrum auction. With telecom stocks in the light now, Bharti Airtel (5.97%) was the top gainer in the Sensex 30 pack.
Hindalco (5.51%) was the top loser in the Sensex 30 stock. A Special Court in Delhi summoned the company's chairman Kumar Mangalam Birla as an accused in a case linked to the coal scam that saw mining rights being assigned without any transparency to private firms.
On Tuesday, US indices closed deeply in the red on continuing fears of a rate increase.
The US wholesale inventories unexpectedly rose in January as sales recorded their biggest decline since 2009. The Commerce Department said yesterday that wholesale inventories increased 0.3% in January after being unchanged in December.
Except for SET Composite index of Thailand (0.84%), Shanghai Composite (0.15%) and Nikkei 225 (0.31%) all the other Asian indices closed in the red. Jakarta Composite (0.79%) was the top loser.
China put out weak data for industrial production, fixed investment, property sales and retail sales today. Japan's core machinery orders fell 1.7% in January from the previous month. European indices were trading in the green. US Futures too were trading higher.