Nifty, Sensex to move sideways to down – Weekly closing report-The Total Investment & Insurance Solutions

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08 July 2016 

I had mentioned in last week’s closing report that Sensex, Nifty were vulnerable to a short-term decline. The major indices in the Indian stock markets were trading listlessly through the week. On a weekly basis, the markets ended flat with the Sensex and Nifty marginally lower and the Bank Nifty marginally higher than last week’s close. The trends of the major indices in the course of the week’s trading are given in the table below: The Total Investment & Insurance Solutions

Indian Indices(The Total Investment & Insurance Solutions)

On Monday, positive global cues, along with higher crude oil prices and firm rupee buoyed the Indian equity markets for the sixth consecutive session on Monday. The key indices traded with appreciable gains to reach their new 2016 intra-day high levels, as healthy buying was witnessed in capital goods, oil and gas, and metal stocks. The BSE market breadth was skewed in favour of the bulls -- with 1,724 advances and 1,016 declines. The Total Investment & Insurance Solutions

Even though Indian commercial banks' shares have moved higher, ignoring Brexit (Britain exiting European Union), the currency volatility risks have to be understood, said US investment banking firm Jefferies in a report. Banks need to make provisions for their exposures to corporate with unhedged foreign currency exposure (UFC) and additional capital buffer for high risk UFCEs, the report said. Jefferies estimate the risk exposure at 1.7% of gross credit exposure for banking system. Banks have built Rs13 billion in provisions and Rs29 billion in additional capital as of FY16. According to the report, Bank of Baroda (BOB) is the only to report Liquidity Coverage Ratio (LCR) in British pound implying five per cent plus of liability in that currency. “This may result in higher hedge costs going forward -- marginal NIM (net interest margin) negative. This of course depends on the currency composition on the asset side -- unfortunately we don't have sufficient public data to delve deeper," the report said. Bank Nifty closed at 18,097.65, up 0.62%. The Total Investment & Insurance Solutions

On Tuesday, bearish global cues, subdued the Indian equity markets. Consequently, the key indices traded in the red during the late-afternoon session. Heavy selling pressure was witnessed in automobile, banking and information technology (IT) stocks. The BSE market breadth was tilted in favour of the bears -- with 1,277 advances and 1,476 declines. The Total Investment & Insurance Solutions

China is highly concerned with Indian trade remedy measures against Chinese steel products, the Ministry of Commerce said. The Indian government has launched an anti-dumping investigation into colour-coated steel sheets imported from China. It is the fifth such probe against China from India this year, the highest record among WTO members, according to a statement on the ministry's website. The global steel industry was experiencing difficulties due to sluggish economic growth and weak demand, but abuse of trade remedy measures would not help resolve industrial overcapacity but hamper normal trade, the statement said. SAIL shares closed at Rs47.50, up 1.50% on the BSE on Tuesday.

Wednesday was a market holiday on account of the Muslim festival Eid-ul-Fitr. On Thursday, the major indices of the Indian markets ended flat compared to Tuesday’s close and there were just marginal gains. Technology stocks, including those in media and entertainment space, came under selling pressure with their sectoral indices losing over 1.5%, even as the indices for fast-moving consumer goods, healthcare and banking sectors closed with gains.

Negative global cues and profit booking dragged the key Indian equity markets lower on Friday. The equity markets traded flat and ended marginally in the red, as heavy selling pressure was witnessed in capital goods, banking and oil and gas stocks. Midcap and smallcap indices traded lower. Pharma, auto and IT indices traded with gains. PSU bank, FMCG (fast moving consumer goods), realty and metal indices traded in the red. The Total Investment & Insurance Solutions