Nifty, Sensex in the grip of bulls – Weekly closing report

We had mentioned in last week’s closing report that Nifty, Sensex were upward bound but were overbought. The major indices rallied during the week and closed on Friday with gains 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 indices of the Indian equity market opened in the green on Monday and closed with strong gains. On the NSE, there were 1,257 advances, 485 declines and 350 unchanged.
 
Amid mixed global cues Sensex surged close to 250 points as key equity indices opened in green on Monday, owing to gains in the banking and finance stocks. Buying was seen in all the sectors with BSE Oil and Gas index leading the pack, closely followed by banking and finance scrips. 
 
The share price of Birla Corporation fell over 14% on Monday after the National Green Tribunal (NGT) ordered a stop to all mining activities in Rajasthan`s Chittorgarh city. The company said that it was studying the implications of the NGT order on its mining operations at Chanderia.
 
Insurance regulator Irdai is awaiting state-run LIfe Insurance Corp`s (LIC) proposal on the timeline of reducing its stake of 51% in IDBI Bank before taking any decision to enforce the 15% equity cap, a senior official said on Monday. As per Irdai rules, LIC will have to pare its stake to 15% keeping in place the regulator`s investment limit in listed investees.
 
The indices opened higher on Tuesday over Monday’s close and closed with strong gains. On the NSE, there were 1,082 advances, 661 declines and 335 unchanged.
 
Public sector banks are in no hurry to follow big brother SBI in linking their deposit and lending rates to the RBI's repo rate, which may further irk the Reserve Bank of India for not transmitting the lower interest rates to the customers. While some of them do admit that ultimately linking to repo rate might happen but they are not firm on the time of such commitment. Many bankers said the mismatch between deposits and credit growth, and competition from the government for small-savings offering over 8% returns in many schemes, raise their cost of capital, restraining them to transmit monetary policy easing.
 
Telecom major Bharti Airtel will slash its stake in Bharti Infratel to 18.3% by selling around 32% stake to Nettle Infrastructure Investments, a regulatory filing by Infratel said on Tuesday. Nettle Infrastructure, a wholly-owned subsidiary of Bharti Airtel, has 3.2% stake in Infratel. After the transaction, its stake would rise to 35.2%, it said. Bharti Airtel currently has 50.3% stake in the telecom tower company.
 
Indian stock markets were range-bound on Wednesday and closed with gains over Tuesday’s close. On the NSE, there were 609 advances, 1,132 declines and 336 unchanged.
 
Lower food prices eased India's February retail inflation to 2.57%, while a sharp decline in manufacturing output slowed industrial production in January to 1.7%, official data showed on Tuesday. Lower food prices halved India's retail inflation in February to 2.57% from 4.44% in the year ago month. Sequentially, the Consumer Price Index (CPI) in February (2.57%) was higher than January's retail inflation rate of 1.97%. 
 
As per the data, the rate of manufacturing sector output growth slowed to 1.3% in January from year-on-year rise of 8.7%. On the YoY basis, mining production edged higher 3.9% and the sub-index of electricity generation inched up 0.8%. 
The indices were range-bound on Thursday and ended flat. On the NSE, there were 730 advances, 1,010 declines and 338 unchanged.
 
The Sensex, which closed at 37,752.17 on Wednesday, opened higher at 37,840.64. Minutes into trading, it was quoting at 37,877.08, up by 124.91 points, or 0.33%. The broader Nifty 50, which closed at 11,341.70 on Wednesday, was quoting at 11,374.90, up by 33.20 points or 0.29%. Sensex and Nifty ended higher on Wednesday despite weak global cues from a fresh wave of political scepticism originating from the UK over the defeat of Brexit deal. However, a sustained inflow of foreign funds aided the gains in the currency, as well as domestic equities. 
 
Infosys would open a digital innovation centre at Bucharest in Romania to develop software for clients based on cloud, big data, artificial intelligence and machine learning, said the IT major.
 
Industrial credit in the country rose by 5.2% on a year-on-year (YoY) basis in January 2019. The growth rate was highest since February 2016 when it was recorded at 5.4%. This growth was mainly led by infrastructure (which grew by 12.6% YoY). As for broader segments, the large industrial segment, which accounts for 82.7% of industrial credit, rose 6.1%. Loans provided to the infrastructure segment account for 35.9% share of the total credit provided to the industrial sector.
 
The Indian equity indices opened on a positive note on Friday with the BSE Sensex gaining over 200 points, taking cues from the major Asian markets. The BSE Sensex on Friday touched the 38,000 mark for the first time since September, supported by buying in the banking and finance stocks. The Nifty50 on the National Stock Exchange also touched 11,400 points after a period of six months. Gains in the major Asian markets also aided the rise in the Indian indices, analysts said. 
 
Sensex ended 269 points higher, Nifty above 11,400; IT (information technology) stocks were found to outshine. 
 
On the sectoral front, IT (information technology) index has outperformed the other indices with nearly 2% gain followed by auto, infra, metal and pharma, while selling was seen in the FMCG (fast moving consumer goods) space.
 
The National Company Law Apellate Tribunal (NCLAT) has adjourned hearing on the Essar Steel case till March 15, asking the promoters to clear all the group's dues as per the Supreme Court's order and then come back to it. The development comes after Essar Steel MD Prashant Ruia and Essar Group executives, as well as the Standard Chartered Bank, filed a fresh petition before the NCLAT on Monday, seeking to set aside the ArcelorMittal's winning bid approved by the National Company Law Tribunal's Ahmedabad bench. Essar Steel's debt stands at Rs49,000 crore while that of its former parent, Essar Group, adds up to over Rs80,000 crore. The tribunal on Thursday told the petitioners to clear the whole of Essar Group's dues first and then come with a resolution plan for Essar Steel. Essar promoters' counsel sought a week's time for this. The bench also asked ArcelorMittal to raise its bid for Essar Steel as the promoters of the insolvent company have proposed a resolution plan with a higher bid. The ArcelorMittal's resolution plan which was approved by the Ahmedabad-bench of NCLT had a bid of Rs42,000 crore, compared to Ruias' bid of Rs54,389 crore. Essar Shipping shares closed at Rs10.80, down 0.92% on the NSE.
 
Japanese electronics and entertainment major Sony Corp is in advanced talks to buy a stake in Zee Entertainment Enterprises, a media report said earlier in the day. The report added that the entire amount raised through the stake sale was likely to be used to repay promoter debt worth Rs13,000 crore. In January, Chandra, who has been under pressure from lenders to pay up, won a three-month reprieve to find a buyer for ZEEL to raise the money. Zee Entertainment Enterprises Limited shares closed at Rs455.40, up 1.24% on the NSE.

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