Close below 6,650 on the Nifty may pull it lower

Last week we had mentioned that the market is currently highly overbought. Today the NSE recorded a huge volume of 90.60 crore shares but the index witnessed a weak upmove. Although the market opened and hit its all time high at the beginning of the session the benchmarks soon lost momentum and started heading down until it completely moved into the red where it traded for nearly two hours. In the last few minutes of the session the indices pulled back into the green and closed marginally higher from Friday’s close. 

The Sensex opened at 22,423 while the Nifty opened at 6,723. The benchmarks hit a high of 22,467 and 6,730 from where they went loser to hit a low of 22,254 and 6,662. The Sensex closed at 22,386 (up 46 points or 0.21%) while the Nifty closed at 6,704 (up 8 points or 0.12%).

Among the other indices on the NSE, the top five gainers were Metal (3.75%), Realty (2.86%), Smallcap (1.70%), M N C (1.44%) and Commodities (1.42%). The top five losers were P S E (0.87%); Infra (0.81%); F M C G (0.58%); C P S E (0.45%) and Bank Nifty (0.10%).

Of the 50 stocks on the Nifty, 28 ended in the green. The top five gainers were Hindalco (7.72%), Jindal Steel (4.20%), Tata Steel (3.22%), A C C (2.75%) and Sesa Sterlite (2.68%). The top five losers were O N G C (3.34%), I D F C (2.95%), Dr Reddy (2.65%), Bhel (2.55%) and Tech Mahindra (2.36%).

Of the 1,543 companies on the NSE, 1,024 companies closed in the green, 430 companies closed in the red while 89 companies closed flat.

Market now looks ahead for the RBI First Bi-monthly Monetary Policy Statement, 2014-15 on 1 April 2014.

India's fiscal deficit in the first eleven months of the FY 2013-14 touched Rs 5.99 trillion, or 114.3% of the full year target, government data showed on Monday. The deficit was 97.4% during April-February a year ago. In the interim budget in February, the Congress-led government had revised the full-year fiscal deficit target to Rs 5.25 trillion, or 4.6% of gross domestic product, from Rs 5.42 trillion, or 4.8%, earlier.

RBI on Friday said it will borrow Rs 1.9 lakh crore through issuance of short-term bills in the market in the April-June 2014 quarter.

Tata Steel was among the top five gainers among the BSE 30 stocks. It rose 3.40% to close at Rs393.85 on the BSE. Tata Steel was in news for that it will start production from its greenfield plant at Kalinganagar in Odisha from the last quarter of next fiscal. The Kalinganagar project, which will produce flat products, will have 3 mtpa capacity in the first phase. This would be doubled in the next phase.

Dr Reddy’s Lab was among the top five losers in the pack of Sensex 30 stocks. The stock fell 2.15% to close at Rs 2,560.80 on the BSE. The company plans a fresh foray into the Japanese market. This comes in after last June the company decided to terminate their memorandum of understanding to enter into an exclusive partnership in the generic drugs business for the Japanese market and to establish a joint venture in the island nation in East Asia with Fujifilm Corporation.

Except for Shanghai Composite (down 0.41%), KLSE Composite (down 0.08%) and NZSE 50 (down 0.06%) all the other Asian indices trading today closed in the green. Nikkei 225 (0.90%) was the top gainer.

European indices were trading solidly higher. US Futures were also trading higher.

US indices closed flat with positive bias on Friday. Data from the US showed that household purchases rose the most in three months. Household purchases, which account for almost 70% of the US economy, climbed 0.3% after a 0.2% gain in January that was smaller than previously estimated, Commerce Department figures showed. Federal Reserve Chair Janet Yellen is scheduled to deliver remarks at a conference in Chicago on Monday.