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Nifty, Sensex May Rally If Global Markets Remain Steady – Weekly closing report

We had mentioned in last week’s closing report that Nifty, Sensex might head higher. The major indices of the Indian stock markets were volatile during the week and suffered a correction to close on Friday with losses over last Friday’s close. The trends of the major indices in the course of the week’s trading are given in the table below:

 

 
The major indices of the Indian stock markets were range-bound on Monday and ended flat. On the NSE, there were 1,129 advances, 643 declines and 114 unchanged.
 
The last session of 2018's trade ended on a flat note with the Sensex declining 8 points and the Nifty adding just 2 points to its previous close. The indices however were in the green for the most part of Monday's trade session but were dragged by weakness in key stocks of sectors like realty, oil and gas and energy.
 
The indices advanced during the afternoon session of trade after opening higher in line with global markets on Monday over signs of progress in the US-China trade stand-off. The indices had, however, slipped in the red for a short while -- 12-1 p.m. -- as oil and gas and energy stocks witnessed selling pressure. Finally, by close of trading the major indices ended flat. Asian stocks also traded in the green after US President Donald Trump said: "Just had a long and very good call with President Xi of China. Deal has been moving along very well. If made, it would be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!" he said.
 
Macro-economic data points, coupled with Indian rupee's performance against the US dollar would influence domestic equity market's trajectory during the week, pointed out market analysts.
 
The Central government has decided to infuse Rs10,086 crore into Bank of India. The bank informed the BSE in a regulatory filing on Saturday that the capital infusion in its equity will be done by way of preferential allotment. According to the filing, the bank's board will consider "by way of circular resolution on or after January 2, 2019 the proposal for raising capital by this infusion and further issue of equity shares or securities at an appropriate time and other incidental matters thereat".
 
The major indices of the Indian stock markets made a minor rally on Tuesday and closed with gains over Monday’s close.
 
A last hour pick-up in banking and realty stocks, along with positive global markets, buoyed the key Indian equity indices on Tuesday. The day's trade saw 30-scrip Sensex gaining over 180 points to regain the 36,000 points-mark. However, the two key indices traded mostly in the red throughout the day's session, but a sharp recovery in the last hour changed the overall scenario. Index-wise, the S&P BSE Sensex settled 186.24 points or 0.52% higher at 36,254.57 points after touching an intra-day high of 36,284.04 and a low of 35,888.62. The NSE Nifty50 closed at 10,910.10 points up 47.55 points or 0.44%. Expectations of weak monthly auto sales and slower industrial November data, concerned the market, observed market analysts. Apart from realty sector, finance stocks also edged higher, gaining close to 1%.
 
The major indices of the Indian stock markets suffered a correction on Wednesday, as premarket US futures traded deeply in the negative and the Hong Kong market fell more than 700 points, down 2.77%. The rupee fell sharply and there was a slowdown in the manufacturing PMI data. On the NSE, there were 549 advances, 1,134 declines and 381 unchanged.
 
Most sectoral indices traded in the negative, led by auto, metal and banking stocks. The S&P BSE auto index lost 534.70 points on weak December auto sale figures. Also, the decline in the Nikkei Manufacturing Purchasing Managers' Index released during the day subdued the market sentiments. The index declined to 53.2 in December, from 54 in November.
 
The Indian currency slumped 45 paise on Tuesday to trade at 69.89 per dollar (around 1.20 p.m.), against the previous close of 69.45 per dollar.
 
Automobile major Maruti Suzuki India reported a decline of 1.3% in its total sales including exports for December 2018. According to the company, a total of 128,338 units were sold last month, compared to 130,066 units' off-take recorded during the corresponding period of the last financial year. The total sales were dragged down by heavy decline in export. It slumped 36.4% to 6,859 vehicles. However, the company's domestic sales rose 1.8% on a year-on-year basis to 121,479 units in December. The company's domestic passenger vehicles sales was up 1% to 1,19,804 units, while sales of light commercial vehicles in the country rose 130.7 per cent to 1,675 units.
 
Automobile major Mahindra and Mahindra (M&M) reported a meagre 1% rise in its total vehicle sales for December 2018, owing to tight liquidity and low buying sentiment in the domestic market.
 
The major indices of the Indian stock markets suffered a correction on Thursday and closed with significant losses over Wednesday’s close. On the NSE, there were 553 advances, 1,148 declines and 361 unchanged.
 
Amid weak factory data from China and India earlier in the week fuelling concerns of a slowdown in global growth and a sustained weakness in the domestic currency pulled the benchmark Sensex down on Thursday. Energy, oil and gas and capital goods came under selling pressure, while realty traded in the green on the expectation that the GST (Goods and Services Tax) Council at its January 10 meeting would bring down the tax rate on under-construction housing to 5% from 12%. FMCG (fast moving consumer goods) stocks managed to advance. 
The Indian currency weakened by 12 paise on Thursday to trade at 70.29 per dollar, against the previous close of 70.17 per dollar.
 
The HDFC's Board would consider raising Rs45,000 crore through issuance of secured redeemable non-convertible debentures (NCDs). Accordingly, the company's Board would consider the issuance of NCDs on private placement basis in a meeting on January 29, 2019. "The board of directors of the corporation shall consider issuance of secured redeemable non-convertible debentures, in various tranches under Shelf Disclosure Document, aggregation Rs45,000 crore on a private placement basis in accordance with the approval granted by the shareholders of the corporation at the 41st Annual General Meeting held on July 30, 2018," the company said in a regulatory filing to the BSE.
 
Lending major Bank of Baroda (BoB) finalised the equity share exchange ratio for amalgamation of Dena Bank and Vijaya Bank, subject to statutory regulatory approval.
 
On Friday, the major indices of the Indian stock markets were range-bound and closed with gains over Thursday’s close. On the NSE, there were 868 advances, 829 declines and 364 unchanged.
 
Sensex gained around 200 points on Friday as financial stocks rose. 
 
Earlier, Chinese factory data along with that of India's suggested a global growth slowdown, which was further magnified after a weak US factory data outcome. The latest addition to the worries was tech major Apple's announcement of cutting its financial forecast, partly blaming US trade tensions with China along with a slowdown in the Chinese economy. Apple is one of the world's largest companies by market value and it was the first time in years that it has sharply cut its growth forecast.
 
Public sector lender Union Bank of India plans to raise up to Rs600 crore through "Employee Share Purchase Scheme", subject to shareholders' approval. According to the bank, its Stakeholders Relationship Committee (SRC) has approved the scheme for raising the equity capital. "...The SRC at its meeting held on Thursday, 3 January, 2019, inter alia, discussed and approved the following - a scheme namely 'Union Bank of India - Employee Share Purchase Scheme' to raise equity capital aggregating up to Rs600 crore...," the bank said in a regulatory filing to the BSE. As per the filing, the bank will raise the equity capital by "...offering, issuing and allotting up to 8,00,00,000 new equity shares to the eligible employees of the bank". The bank added that it will seek shareholders' approval for the scheme through postal ballot and e-voting. The bank’s shares closed at Rs92.85, up 4.62% on the NSE.

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Indian Market: Huge Volatility but No Trend
Is the market climate turning increasingly bearish? The news headlines and the huge swings in stock prices seem to suggest that. On Thursday, Apple Inc shocked the world by announcing that its revenues were much lower in the holiday (December) quarter, mainly due to a severe slowdown in China. This is an ominous indicator of global economic health. The stock of Apple fell almost 10% as...
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