A close above 5,885 on the Nifty tomorrow can reverse the downtrend

The weak rupee and a sell-off in metal stocks following CBI action saw the market declining over 1.5% today. A close above 5,885 on the Nifty tomorrow can reverse the downtrend. The National Stock Exchange (NSE) recorded a volume of 66.40 crore shares and advance-decline ratio of 301:1063.

The Indian market opened lower on worries as the rupee hit a new all-time low. Unsupportive cues from the Asian markets also weighed on investor sentiment. Meanwhile, US markets closed flat in overnight trade even as ratings agency Standard & Poor’s revised US’ sovereign credit outlook to stable from negative.

The Nifty opened 29 points lower at 5,549 and the Sensex resumed trade at 19,382, down 59 points from its previous close. The benchmarks hit their intraday high in initial trade itself on support from IT and technology stocks as the declining rupee brightened their prospects.

The gains were short-lived as the market soon continued its southbound journey on selling in metal, healthcare, realty and power sectors. The rupee the rupee on Tuesday fell by a whopping 74 paise to hit a new all-time low of 58.90 in the late morning trade on persistent dollar demand from importers and banks as well as heavy capital outflows amid weak local equities.

The market continued its decline and touched its low in noon trade on selling pressure from metal, realty, consumer durables, power and banking stocks. The Nifty fell to 5,780 and the Sensex declined to 19,121 at their respective lows.

The benchmarks made a feeble recovery attempt after touching their lows but selling pressure kept the market range-bound in the negative terrain.

The impact of the weakness in the rupee was seen on the consumer durables sector which was the lop today while the metal sector declined after the CBI filed fresh cases against Navin Jindal and his company Jindal Steel & Power and former minister of state for coal Dasari Rao in the coal block allocation scam.

The market finally closed near the lows of the day with the Nifty declining 89 points (1.52%) to 5,789 and the Sensex settling at 19,143, a drop of 298 points (1.53%).

Among the broader indices, the BSE Mid-cap index declined 1.60% and the BSE Small-cap index dropped 1.82%.

All sectoral indices closed in the red today. The main losers were BSE Consumer Durables (down 6.36%); BSE Metal (down 4.13%); BSE Realty (down 3.68%); BSE Bankex (down 2.24%) and BSE Power (down 2.07%).

Out of the 30 stocks on the Sensex, five settled higher. The gainers were Cipla (up 1.90%); Bajaj Auto (up 0.83%); Wipro (up 0.69%); Coal India (up 0.39%) and Hindustan Unilever (up 0.30%). The major losers were Jindal Steel & Power (down 15.18%); Hindalco Industries (down 5.97%); Tata Power (down 5.87%); ONGC (down 3.91%) and ICICI Bank (down 3.75%).

The top two A Group gainers on the BSE were—Satyam Computer Services (up 4.17%) and Tech Mahindra (up 2.91%).

The top two A Group losers on the BSE were—JSPL (down 15.18%) and JSW Energy (down 11.16%).

The top two B Group gainers on the BSE were—Saboo Sodium Chloro (up 20%) and Best & Crompton Engineering (up 19.73%).

The top two B Group losers on the BSE were—Capital First (down 19.52%) and MVL (down 19.51%).

Of the 50 stocks on the Nifty, 11 ended in the in the green. The main gainers were Ambuja Cement Company (up 1.85%); Cipla (up 1.84%); Bajaj Auto (up 1.01%); GAIL India (up 0.61%) and Ranbaxy Laboratories (up 0.57%).The major losers were JSPL (down 15.25%); Hindalco Ind (down 6.31%); Tata Power (down 6.10%); DLF (down 4.23%) and ONGC (down 4.02%).

Markets in Asia settled in the negative as the Bank of Japan declined from making any announcement to ease the recent market volatility. A sell-off in other markets in the region led to the overall decline.

The Shanghai Composite declined 1.39%; the Hang Seng fell 1.20%; the Jakarta Composite tanked 3.50%; the KLSE Composite fell 0.46%; the Nikkei 225 dropped 1.45%; the Straits Times declined 0.94%; the Seoul Composite lost 0.62% and the Taiwan Weighted settled 0.54% lower.

At the time of writing, the key European markets were down between 1.51% and 1.54% as the German constitutional court started a two-day hearing into the legality of the ECB's bond-buying program. At the same time, the US stock futures were in the red, indicating a lower opening for US stock later in the day.

Back home, institutional investors were net sellers in the equities segment on Monday. While FIIs pulled out Rs114 crore, DIIs withdrew Rs69.75 crore from stocks.

Adani Group-owned Adani Ports and Special Economic Zone (APSEZ) has raised Rs1000 crore through institutional placements, thereby reducing the promoter shareholding in the company from 77% earlier to 75% now, confirming to SEBI norms on promoter holding. The stock declined 1.86% to Rs148 on the NSE.

JK Paper, a JK Singhania Group company, is set to commission its Rs1,700-crore expansion project in Rayagada, Odisha by August as it gears up to consolidate its speciality paper business. The expansion project, which adds a capacity of 1.65 lakh tonnes of paper a year, and pulping capacity of 2.15 lakh tonnes, will enable the company to augment Rs800-Rs850 crore in revenues in a full year of operation. The stock fell 0.69% to close at Rs28.80 on the NSE.

IL&FS Engineering Services has bagged a Rs266.50-crore construction order from Rapid Metro Rail-Gurgaon (Phase II) project. The contract involves construction of single and double track elevated viaduct for the metro project in Gurgaon from its special purpose vehicle formed for its implementation and is expected to be completed in 24 months. The stock declined 1.71% to settle at Rs31.70 on the NSE.