We had mentioned in Monday’s closing report that Nifty, Sensex might fall further. The major indices of the Indian stock markets were range-bound on Wednesday and closed with very small gains over Monday’s close. The trends of the major indices in the course of Wednesday’s trading are given in the table below:
The Indian equities market traded flat during the mid-afternoon trade session on Wednesday. Negative global cues, coupled with slide in factory output data for July and profit booking dented investors' sentiments. However, the BSE market breadth was tilted in favour of the bulls -- with 1,764 advances and 947 declines and 198 unchanged. On the NSE, on Monday, there were 1006 advances, 458 declines and 57 unchanged.
On Monday, both the key Indian indices were dragged lower by increased possibility of a US rate hike, coupled with profit-booking and outflow of foreign funds. The Indian equity markets were closed on Tuesday on account of Eid-ul-Zuha.
IT (information technology) stocks faced resistance at higher levels due to profit booking, while banking, auto and pharma stocks held early gains due to buying support at lower levels. Oil-gas stocks traded with mixed sentiments. Aviation stocks traded with mixed sentiments on profit booking, and power sector stocks witnessed buying support from lower levels. FMCG (fast moving consumer goods) stocks traded with mixed sentiments on short covering at lower levels.
India's annual rate of inflation based on wholesale prices moved up to 3.74% in August, from 3.55% in the month before, as per official data released on Wednesday. Nonetheless, the annual rate of inflation for some commodities remained rather high: Potatoes (66.72%), pulses (34.55%) and fruits (13.91%). But onion prices were down 64.19% in August this year, against the like month of the previous year. Data released by the Commerce and Industry Ministry further showed that the annual inflation for manufactured products and fuels remained modest at 2.42% and 1.62%, respectively. Earlier, data on the consumer price index released on Monday by the Central Statistics Office (CSO) had showed that the annual retail inflation had eased by 100 basis points to 5.05% in August. With inflation easing, there is reduced pressure on aggregate demand and corporate earnings.
Credit rating agency Moody's Investors Service on Wednesday said the State Bank of India's (SBI) issuance of additional tier 1 (AT1), Basel III compliance securities would set the pricing benchmark for other issuers. Moody's said the SBI's issue price would also provide Indian banks with an alternative funding option. "We expect more Indian banks will look to raise capital via this route to overcome some of the limitations of the domestic bond market," Alka Anbarasu, Vice President and senior analyst was quoted as saying in a statement. "In particular, most Basel III securities issued by the banks domestically have been privately placed, thereby offering limited liquidity for investors," she added. On Wednesday Moody's assigned a B1 (hyb) rating to the perpetual non-cumulative capital securities issued by SBI, Dubai International Financial Centre (DIFC) branch. The terms and conditions of the capital securities incorporate Basel III-compliant non-viability language in accordance with Reserve Bank of India (RBI) guidelines, and will qualify as AT1 capital securities. The securities are issued under SBI's $10 billion Medium Term Note (MTN) programme, via the bank's DIFC branch. According to Moody's the other recent measures like capital infusion by the Indian government and issue of securities will boost SBI's loss absorbing capacity and help in managing its bad loans. The bond market is likely to see more growth in the country with reduced bullish trends in the equity markets.
The board of Reliance Capital, part of the Anil Ambani-led group, on Tuesday approved a proposal to independently list its home finance business on the stock exchanges. The independent listing of Reliance Home Finance is expected to unlock substantial value for existing shareholders of Reliance Capital, the company said in a statement. "The listing of Reliance Home Finance will also lead to increased management focus and accelerated growth in the home finance business," it added. "To address the needs of this sector, Reliance Home Finance has charted an aggressive growth plan in this space, and aims to increase its book size to over Rs50,000 crore in the next few years," said Anmol A Ambani, Director, Reliance Capital. According to the proposal, 49% stake in Reliance Home Finance will be allotted to all shareholders of Reliance Capital, in the ratio of one share free of cost in Reliance Home Finance for every one share held in Reliance Capital. Reliance Capital shares closed at Rs578.85, up 8.69% on the BSE.
US median household income saw the first annual increase in 2015 since the Great Recession, said the US Census Bureau on Tuesday. The median household income reached $56,516 in 2015, 5.2% higher than the level in 2014. "This is the first annual increase in median household income since 2007, the year before the most recent recession," it said in a statement. The data was 2.4 per cent lower than the peak level of the median household income of $57,909 in 1999, the bureau said. The data shows the remarkable progress that American families have made as the recovery continues to strengthen, said Jason Furman, chairman of the Council of Economic Advisers under the White House. The bureau also said the US poverty rate in 2015 fell to 13.5%, 1.2 percentage point lower from 2014 and the people in poverty reduced to 43.1 million, 3.5 million lower than 2014. This is one more indicator that US equity markets are likely to be in a bullish trend in the current season.
State-run telecom company Mahanagar Telephone Nigam Ltd's (MTNL) net loss was slightly lower for the April-June quarter at Rs718.02 crore, a regulatory filing said here on Tuesday. The company posted a net loss of Rs734.24 crore during the corresponding quarter in 2015-16. The total income of the company for the April-June quarter was at Rs744.72 crore, which is slightly less than Rs780.12 crore clocked during the same period a year ago. MTNL shares closed at Rs20.65, down 2.82% on the BSE.
The top gainers and top losers of the major indices are given in the table below:
The closing values of the major Asian indices are given in the table below:
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