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29Th July 2016
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Major Indices (The Total Investment & Insurance
Solutions)
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I had
mentioned in the last week’s closing report that Nifty, Sensex were in a
bullish mode still. The major indices of the Indian stock markets were bullish
on most trading days of the week and scaled some recent highs. The trends of
the major indices in the course of the week are given in the table below:
Short covering, coupled with
expectations of major economic legislation getting parliament's approval,
buoyed the Indian equity markets on Monday. The benchmark indices closed the
day's trade with substantial gains as healthy buying was witnessed in banking,
automobile and consumer durables stocks. On the NSE, there were 1,001 advances,
469 declines and 63 unchanged. On the BSE, there were 1,724 advances, 990
declines and unchanged 197.
On Monday, initially, the benchmark
indices opened on a flat-to-positive note, in sync with their Asian peers.
Besides, the equity markets were pushed up by higher European indices, healthy
quarterly earnings and above average monsoon rain falls. In addition, hopes on
the passage of the GST (Goods and Services Tax) Bill during parliament's
ongoing monsoon session supported prices. Further, investors' expected US Fed
to maintain its key lending rates during the upcoming FOMC (Federal Open Market
Committee) meet.
On Tuesday, the benchmark indices
opened on a flat-to-positive note in sync with their Asian peers. However,
negative Japanese indices, lower crude oil prices and a weak rupee dented
sentiments. Besides, investors were seen cautious ahead of Finance Minister
Arun Jaitley's meeting with his counterparts from the states to discuss
proposed amendments to the GST (Goods and Services Tax) Bill. The pan-India tax
reform has been passed by the Lok Sabha but is stuck in the Rajya Sabha, where
the government lacks a majority. It is widely expected that the bill will be
listed for discussion in the Rajya Sabha following Jaitley's consultations with
the Empowered Committee of State Finance Ministers. Nevertheless, a logjam in
parliament has spooked investors over the prospects of the bill getting passed.
In addition, volatility was flared by the start of the US Fed's FOMC (Federal
Open Market Committee) meet.
On
Wednesday, profit booking, combined with caution ahead of derivatives expiry,
and a key announcement over the US interest rates, made the Sensex oscillate in
a 300-point range. Sensex had earlier receded during the mid-afternoon trade
session after touching new intra-day highs for the last 11 months. The BSE
market breadth was slightly tilted in favour of the bears -- with 1,341
declines and 1,317 advances. On the NSE advances, there were 787 advances, 798
declines and 78 unchanged. The Total
Investment & Insurance Solutions
The
Indian equity markets on Thursday closed at new highs in almost a year, riding
on short covering and expectations of a major economic legislation getting
parliament's approval. On a closing basis, the wider 51-scrip Nifty of the
National Stock Exchange (NSE) touched a new 52-week high. The 30-scrip
sensitive index (Sensex) of the BSE also reached its highest closing levels in
11 months. Healthy buying was witnessed in consumer durables, automobiles and
FMCG (fast moving consumer goods) stocks. On the NSE, there were 818 advances,
638 declines and 62 unchanged. The BSE market breadth was slightly tilted in
favour of the bulls -- with 1,486 advances and 1,164 declines. The Total Investment & Insurance
Solutions
US
Federal Reserve on Wednesday (India’s trading day of Thursday) kept federal
funds rate unchanged, reiterating that it continues to closely monitor
inflation indicators and global economic and financial developments.
"Near-term risks to the economic outlook have diminished," said the
Fed in a statement after concluding two-day monetary policy meeting. This new
expression might indicate that conditions are getting more favourable for
further interest rate hikes in the future. Fed officials gave more upbeat
description of the economy. There was some increase in labour utilisation in
recent months, pointing to a healthy labour market despite the slowdown in
April and May. Household spending have grown "strongly." Inflation
continues to run below the Fed's 2% target, a major concern for Fed officials.
But they expected inflation to rise to the target over the medium term as the
transitory effects of past declines in energy and import prices dissipate and
the labour market strengthens further. The policy to keep interest rates
unchanged is good news for emerging markets like India, as it attracts foreign
institutional investors. The Total
Investment & Insurance Solutions
On
Friday, Indian equity markets traded in the red as selling pressure was
witnessed in banking, consumer durables, and capital goods stocks. The indices
closed lower by around 0.50% over Thursday’s close. The Total Investment & Insurance Solutions
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