Nifty may try to bounce back but may get stalled at 5,820
The market closed in the red for the third straight day following the pullout of the DMK from the ruling UPA led coalition government at the Centre. A statement by the RBI in its mid-quarter policy review that, “headroom for further monetary easing remains quite limited” added to the gloom among investors. The Nifty may try to bounce back but may get stalled at 5,820.
The National Stock Exchange (NSE) recorded a turnover of 72.30 crore shares and advance-decline ratio of 343:1176.
The market opened in the positive on hopes that the Reserve Bank of India (RBI) will cut key policy rates in its mid-quarter monetary policy review in order to boost growth. Markets across Asia, which were firm in morning trade, also boosted risk appetite among domestic investors. On the other hand, US markets were down around 0.50% in overnight on Cyprus’ plan to tax bank depositors in return for a bailout package from the European Union.
Back home, the Nifty opened 25 points higher at 5,860 and the Sensex resumed trade at 19,346, a gain of 53 points over its previous close. Buying support from realty, auto and banking stocks lifted the benchmarks to their intraday highs in initial trade itself. At the highs the Nifty went up to 5,864 and the Sensex rose to 19,379.
However, profit booking at higher levels led the market gradually lower in subsequent trade. Meanwhile, the RBI in its policy review announced a 25 basis point cut in the repo rate while keeping the cash credit ratio (CRR) unchanged at 4%. Almost at the same time, a news flash about the DMK withdrawing support to the UPA-led government at the Centre saw the market plunge into the negative.
The political developments led the market to its intraday low around 11.30am with the Nifty dropping to 5,724 and the Sensex tumbling to 18,939. But finance minister P Chidambaram’s assurance that the government was stable despite the DMK’s withdrawal of support helped the indices recover from their lows. The indices were range-bound in noon trade.
Meanwhile, faced with mounting criticism in Cyprus and a hostile reaction from the global markets, the Eurozone finance ministers have decided to ease the conditions of a bank levy for small savers, which was agreed last Saturday as part of a 10 billion euro ($13 billion) bailout for the debt-stricken nation.
The market continued to trade sideways till the end of the trading session wherein investors brushed aside the 25 bps repo rate cut by the central bank but were worried about the political instability arising today.
The market closed in the red on the back of the political developments at the Centre, which overshadowed the RBI’s rate cut. The Nifty settled 89 points (1.53%) down at 5,746 and the Sensex dropped 285 points (1.48%) but managed to end trade a tad above the 19,000-mark at 19,008.
Among the broader indices, the BSE Mid-cap index declined 1.37% and the BSE Small-cap index tanked 1.57%.
The rout in the market saw all sectoral indices settling lower. The top losers were BSE Realty (down 3.63%); BSE Capital Goods (down 2.69%); BSE Metal (down 2.59%); BSE PSU (down 2.08%) and BSE Power (down 1.99%).
Six of the 30 stocks on the Sensex closed in the positive. The main gainers were GAIL India (up 1.96%); Bajaj Auto (up 1.17%); Sun Pharmaceutical Industries (up 0.74%); ITC (up 0.44%) and Maruti Suzuki (up 0.16%). The key losers were BHEL (down 5.05%); Bharti Airtel (down 4.74%); Sterlite Industries (down 4.15%); Jindal Steel & Power (down 3.96%) and Mahindra & Mahindra (down 3.45%).
The top two A Group gainers on the BSE were—Coromandel Industries (up 6.25%) and IPCA Laboratories (up 3.20%).
The top two A Group losers on the BSE were—Muthoot Finance (down 9.26%) and Lanco Infratech (down 6.96%).
The top two B Group gainers on the BSE were—Biopac India Corporation (up 20%) and Bharatiya Global Infomedia (up 19.84%).
The top two B Group losers on the BSE were—Bilcare (down 19.96%) and Manappuram Finance (down 19.94%).
Of the 50 stocks on the Nifty, seven ended in the green. The key gainers were GAIL India (up 2.65%); Bajaj Auto (up 1.59%); Ranbaxy Laboratories (up 1.37%); Lupin (up 0.94%) and Sun Pharma (up 0.67%). The main losers were BHEL (down 5.06%); Bharti Airtel (down 4.39%); DLF (down 4.09%); Reliance Infrastructure (down 3.91%) and Sesa Goa (down 3.77%).
Markets in Asia closed mostly higher as Monday’s sell-off saw investors picking up stocks at lower levels. Meanwhile, media reports indicated that the Cypriot parliament the levy on bank deposits, a condition for an EU bailout to the debt-ridden nation.
The Shanghai Composite advanced 0.78%; the Jakarta Composite gained 0.50%; the KLSE Composite advanced 0.35%; the Nikkei 225 jumped 2.03%; the Straits Times rose 0.47%; the Seoul Composite climbed 0.53% and the Taiwan Weighted settled 0.35% higher. Bucking the trend, the Hang Seng lost 0.19%.
At the time of writing, the CAC 40 of France was down 0.80%; the DAX of Germany fell 0.60% and UK’s FTSE 100 was trading 0.36% lower. At the same time, the US stock futures were marginally in the red.
Back home, foreign institutional investors were net buyers of equities totalling Rs506.01 crore on Monday whereas domestic institutional investors were net sellers of stocks amounting to Rs459.89 crore.
Pharmaceutical major Elder Pharmaceuticals today said it has inked a joint venture agreement with Japan's Kose Corporation to manufacture and sell cosmetics in India. Kose will hold 60% stake in the JV, which will be named Kose Elder (India) Pvt Ltd, while Elder will hold the balance 40% stake. The stock declined 1.41% to settle at Rs303.50 on the NSE.
Subex, a provider of business service systems for communication service providers, has been selected by Libyan telecom operator Almada, to provide it with its ROC revenue assurance and fraud management solutions. With this deal, the company has made its first foray into the country. Subex gained 1.29% to close at Rs11.75 on the NSE.
Asian Paints has entered the kitchen space by acquiring a majority stake in the Sleek Group that has a significant presence in the kitchenware segment. In a filing with the exchanges, the company said that its board has approved acquisition of 51% stake in the Sleek Group. Asian Paints declined 1.97% to settle at Rs4,904.10 on the NSE.
