As long as Nifty maintains itself above 6,220, the upmove would continue
On Thursday, we mentioned that a close above 6,235 may bring back the Nifty on an upward trend. Post the Reserve Bank of India (RBI) move to keep the key rate unchanged and global markets either stable or in a rallying mode for the second day after the US announced its tapering, the Indian market bounced back with force. Opening in the green the indices on Friday remained in the positive for the entire session. By the end of the session the Sensex hit a seven day (including today) high while the Nifty hit a six day (including today) high.
Sensex opened Friday at 20,792 while the Nifty opened at 6,180. The Sensex moved from the level of 20,746 to the level of 21,118 and closed at 21,080 (up 371 points or 1.79%) while the Nifty hit a low of 6,170 and closed at 6,274 (up 108 points or 1.74%) after hitting a high of 6,285. The NSE recorded a volume of 69.08 crore shares.
All the other indices on the NSE closed in the positive. The top five gainers were Energy (3.46%); Realty (2.84%); Smallcap (2.45%); Finance (2.31%) and PSE (2.16%).
Of the 50 stocks on the Nifty, 45 ended in the green. The top five gainers were Reliance Industries (4.79%); ONGC (4.33%); Wipro (3.98%); HDFC (3.79%) and M&M (3.53%). The bottom four losers were Sun Pharma (0.72%); Sesa Sterlite (0.66%); Grasim (0.43%) and Power Grid (0.25%).
Of the 1,229 companies on the NSE, 829 closed in the positive, 335 closed in the negative while 65 closed flat.
The Reserve Bank of India plans to sell retail inflation-linked savings certificates from December 23rd to 31st, although it may close sales earlier than scheduled, the central bank said on Thursday. The debt will be pegged to consumer price inflation with a three-month lag in calculating the interest rate plus a fixed rate of 1.5 per cent. Thus, December sales will be pegged to September CPI.
US Indices closed flat on Thursday.
Asian indices had a mixed performance. Straits Times was the top gainer which rose 0.79% while Shanghai Composite was the top loser which fell 2.02%.
The Chinese central bank said at the close of market trading yesterday that it added funding to selected lenders using short-term liquidity operations.
The Bank of Japan kept its asset-purchase levels and overall monetary policy unchanged after a monetary policy review.
European indices were trading in the green while the US Futures were trading marginally higher.
In Europe, the European Union lost its top credit rating from Standard & Poor's, which said the group's cohesion has weakened and its financial profile has deteriorated. S&P cut its long-term rating on the EU to AA+ from AAA and maintained its short-term rating at A-1+. The outlook is stable, the agency said in a statement today.
Among the market news, SEBI has rationalised the periodic call auction mechanism by modifying how it classifies the so-called illiquid stocks. A stock would now be classified as illiquid if its average daily turnover is less than Rs2 lakh in the previous two quarters and if it is classified as illiquid at all the exchanges where it is traded. Call auctions will not apply to shares where a company is profitable in at least two of the past three years and not more than 20% of promoters' shareholding is pledged in the latest quarter and the book value is three times or more than the face value. The new rules also exclude companies with a market capitalisation of at least Rs10 crore or which have paid a dividend in at least two of the past three years. From now, stock exchanges will determine the number of call auction sessions for illiquid stocks. Exchanges will, however, have at least two sessions in a trading day, with one uniform closing session across the exchanges.