If Nifty closes above 5,813, a short term rally may be in the offing
The market on Tuesday opened in the positive, but sharply plunged immediately thereafter. However, buyers appeared instantly and the indices traded for the entire remaining session in the positive. The Sensex and Nifty opened at 19,452 and 5,756 respectively. After plunging to the low of 19,265 and 5,701, respectively, both the indices recovered and by the end of the session hit a high of 19,533 and 5,786, respectively. Both the indices closed almost near the day’s high. The Sensex closed at 19,517 (up 137 points or 0.71%) while the Nifty closed at 5,780 (up 45 points or 0.78%). The National Stock Exchange (NSE) recorded a volume of 50.75 crore shares.
Among the other indices on the NSE, the top five gainers were Realty (2.91%); Bank Nifty (2.76%); Finance (2.60%); PSU Bank (1.80%) and Service (1.44%). The top five losers were Energy (0.92%); Commodities (0.73%); PSE (0.67%); MNC (0.49%) and Metal (0.17%).
Of the 50 stocks on the Nifty, 28 ended in the green. The top five gainers were DLF (6.99%); Ranbaxy (5.90%); Indus Ind Bank (4.66%); Axis Bank (3.98%) and I C I C I Bank (3.45%). The top five losers were Tata Power (3.88%); Sesa Goa (3.18%); N T P C (2.61%); O N G C (2.18%) and Hindustan Unilever (1.82%).
Yesterday after market hours, the data released by the Indian government showed the combined output of the eight core infrastructure sectors rise 3.7% in August 2013, supported by strong growth in coal and cement production and electricity generation. It was the highest growth in core sector output in seven months. On the other hand, the data released by the Reserve Bank of India (RBI) showed India's current account deficit (CAD) had widened to $21.8 billion or 4.9% of GDP in Q1 June 2013 from $16.9 billion or 4% of GDP in Q1 June 2012. The CAD was $18.1 billion in Q4 March 2013.
Bank of America Merrill Lynch (BofA-ML) today lowered its CAD target for India for the current financial year to 3.2% of the GDP from 4% earlier.
The RBI will infuse Rs10,000 crore into the system through open-market operations next week to ease liquidity constraints, based on the current assessment of prevailing and evolving market conditions, said the central bank in a press release on Monday.
Factory activity in India shrank for a second month in September although not as sharply as in August, on the dearth of new orders which pushed firms to cut staff, a survey showed today. The HSBC Manufacturing PMI, compiled by Markit, rose to 49.6 in September from 48.5 in August, but remaining below the 50 mark that separates growth from contraction. The new orders sub-index rose to 49.6 last month from 47.5 in August.
US indices closed in the negative on Monday. The US government began a partial shutdown on Tuesday for the first time in 17 years after lawmakers could not break a political stalemate that sparked new questions about the ability of a deeply divided Congress to perform its most basic functions. Some US government offices and national parks will be shuttered, but spending for essential functions related to national security and public safety will continue, including pay for US military troops.
There are also fears that the conflict could spill over into the more crucial dispute over raising the federal government's borrowing authority. A failure to raise the $16.7 trillion debt ceiling would force the country to default on its obligations, dealing a potentially painful blow to the economy and sending shockwaves around global markets.
All the other Asian indices ended in the green. Jakarta Composite emerged as a top gainer, moving up 0.69%.
A Chinese factory gauge rose less than economists forecast in September, signaling limits on the nation's rebound from a two-quarter economic slowdown. The Purchasing Managers' Index was at 51.1, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today. That compares with 51 in August.
The Bank of Japan's quarterly Tankan index for big manufacturers rose to 12 in September, the highest since 2007, from 4 in June.
European indices were trading mostly in the green, US Futures were trading in the positive.
Eurozone manufacturing activity grew for the third month running in September, despite a slight slowdown that reflected a still uncertain recovery, a survey showed on Tuesday. The Purchasing Managers' Index compiled by Markit Economics for the manufacturing sector dipped to a final 51.1 points in September from 51.4 in July, but still above the 50-points boom-or-bust line.
Markit warned however that unemployment in the area remained the biggest obstacle to growth in manufacturing. Also on Tuesday, official data showed that eurozone unemployment dropped for the first time in more than two years to 12.0 percent in July against 12.1 percent the previous month, and then remained stable in August.
