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Sensex, Nifty to remain range-bound: Weekly Market Report

The index is likely to remain in the 7,445-7,650 range for some more time.

The S&P BSE 30-share Sensex closed the week that ended on 27th June at 25,100 (down 6 points or 0.02%), while the NSE’s 50-share Nifty closed at 7,509 (down 3 points or 0.04%) for the week. We had mentioned in our previous week’s report that the Nifty has to hold above 7,470 for it to make efforts to move up.

On Monday, the index hit a low below 7,470, but managed to rise above this crucial mark again. News of the upcoming budget affected market sentiment. Nifty closed at 7,493 (down 18 points or 0.24%). A hike in the rail passenger fare and freight rates increased the worries of a further rise in inflation. The government will raise its import duty on sugar to 40% from 15%, as the government tries to revive business at mills that owe farmers around Rs11,000 crore, food minister Ram Vilas Paswan said on Monday.

As anticipated, on Monday the indices moved higher, breaking four days of negative move on Tuesday. Nifty closed at 7,580 (up 87 points or 1.16%). There are reports that the government may soon finalise a hike in natural gas prices and that the price hike will be lower than what was suggested according to the formula adopted by the previous UPA government, which recommended doubling the price.

Pessimism on the bourses again set in on Wednesday. Nifty closed at 7,569 (down 11 points or 0.14%). Reserve Bank of India on Tuesday allowed banks to engage non-deposit-taking non-banking finance companies as banking correspondents for financial inclusion.
The sentiments on the bourses were further affected after Cabinet Committee on Economic Affairs deferred a decision on the revision of natural gas prices by three months. Nifty closed at 7,493 (down 76 points or 1.00%).

Nifty continued moving lower on Friday as well. Nifty closed at 7,509 (up 16 points or 0.21%). Oil prices dropped as militant violence in Iraq has not yet affected oil production from the country.  Power & Coal Minister Piyush Goyal said there were anomalies in the proposed formula which needed to be fixed before revising rates.

For the week, among the other indices on the NSE, the top two performers were Pharma (4%) and Smallcap (3%), while the worst two performers were FMCG (3%) and Energy (1%).

Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:

ML Top sector


ML Worst sector








Telecom Services




Oil & Gas




Consumer Products




Software & IT Services




Sensex, Nifty may put in a short rally – Friday closing report
Nifty like to make a short upmove if 7,480 level holds. 

As we mentioned yesterday, A further short decline on the indices was imminent, today the indices opened higher and started moving lower after a range bound session upto 11.00 am. After moving into the red, where the indices hit its day’s low, the indices tried recovering, however could only manage closing marginally higher.
Sensex opened at 25,132 and immediately hit the day’s high at 25,210, while Nifty which opened at 7,514 hit the day's high at 7,539. For a little while, when the indices were trading in the red, the Sensex hit a low at 25,033 and the Nifty at 7,482. Sensex closed at 25,100 (up 37 points or 0.15%) while Nifty closed at 7,509 (up 16 points or 0.21%). The NSE recorded a volume of 96.51 crore shares. India VIX fell 0.42% to close at 17.6275.
The Reserve Bank of India on Thursday released the Financial Stability Report (FSR), June 2014, the ninth issue of the half-yearly publication. The FSR reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council, on risks to financial stability. The latest issue is being brought out at a time when global financial markets are showing signs of improved stability, although growth is still not on strong ground and easy monetary policy continues in many economies. On the domestic front, the return to political stability has improved the outlook and the capital markets reflect the expectations on policy measures to address the adverse growth-inflation dynamics and saving-investment balance as also efficient implementation of policies and programmes.
Oil prices dropped as militant violence in Iraq has not yet affected oil production from the country. As crude prices dropped, concerns arising from the impact of high crude oil prices on India's macroeconomic situation eased. India imports about 80% of its crude oil requirements.
On the much awaited clarity regarding the issue of price the natural gas, the Power & Coal Minister, Piyush Goyal said, there were anomalies in the proposed formula which needed to be fixed before revising rates. Among other things he also mentioned that the gas prices in India cannot be fixed based on a formula that includes Japanese imports.
TCS (3.85%), which was among the top two gainers in the Sensex 30 pack, has recently entered into a five-year contract to develop and modernize mainframe applications of, and service the Dutch insurance firm, REAAL N.V's 'life insurance' portfolio.
CRISIL has downgraded Hindalco Industries' long-term debt rating to 'AA/Stable' from 'AA+/Stable'. Slow growth of volumes at its greenfield projects, lower margins on weak aluminium prices and intense competition facing its US subsidiary Novelis, was the reasoning for the downgrade. Hindalco (2.63%) was the top loser among the Sensex 30 stocks.
Havells India (6.57%), top gainer in the ‘A’ group on the BSE, will hold a meeting of the board of directors of the company on 30 June 2014, to consider and approve the sub-division of the nominal value of equity shares of the company.
Indian Hotels Company (4.83%), top loser in the ‘A’ group on the BSE, was recently in the news stating that it will issue nine compulsorily convertible debentures (CCD) for every 40 equity shares, to raise up to Rs 1,000 crore. The CCDs will be converted into equity shares after 18 months from the date of allotment. No interest shall be paid and no redemption will be allowed on the unsecured CCDs.
US indices closed in the negative on Thursday.
Consumer spending, which accounts for about 70% of the economy, climbed 0.2% in May after narely changing in April, US Commerce Department figures showed.
Except for Hang Seng (0.10%) and NZSE 50 (0.27%) all the other Asian indices closed in the negative. Nikkei 225 (1.39%) was the top loser.
European indices were trading in the green while US Futures were trading in the red.


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