If Nifty, Sensex May Head Lower If It Breaks Today’s Low – Wednesday closing report-The Total Investment & Insurance Solutions

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23 January 2019

I had mentioned in Tuesday’s closing report that Nifty, Sensex were directionless. The major indices of the Indian stock markets suffered a correction on Wednesday and closed with losses over Tuesday’s close. On the NSE, there were 682 advances, 1,012 declines and 364 unchanged. The trends of the major indices in the course of Wednesday’s trading are given below:

After a largely choppy trade session for the better part of Wednesday the Sensex closed lower owing to the last hour selling in index heavyweight ITC, which missed estimates in its quarterly result. ITC lost over 4% after it reported its third quarter results on Wednesday. The FMCG (fast moving consumer goods) major reported a 3.85% year-on-year (y-o-y) growth in its standalone net profit. Globally, market sentiments were weak over concerns of a slowing global economy and the ongoing US-China trade tension. 

Metal stocks were back in favour on Wednesday after closing 2% lower on Tuesday, while IT (information technology), FMCG (fast moving consumer goods) and financials came under selling pressure. Markets globally had reversed course after the International Monetary Fund (IMF) revised down its forecast for global growth.

Analysts said IMF now projects a 3.5% growth rate worldwide for 2019 and 3.6% for 2020 which is 0.2% and 0.1% points below its last forecasts in October 2019, making it the second downturn revision in three months. Investors were also cautious owing to reports that the US turned down an offer to hold preparatory trade talks with China. This was later denied by the US administration.

The Indian rupee, however, gained 17 paise to trade at 71.27 (around 3.30 p.m.,) against the US dollar, providing some support to the overall dismal sentiment. It closed at 71.27 per dollar on Tuesday.

FMCG (fast moving consumer goods) major ITC Ltd reported a 3.85% year-on-year (y-o-y) growth in its standalone net profit to Rs3,209.07 crore for the third quarter ending on December 31, 2018 as compared to Rs3,090.20 crore in the corresponding period last year. Driven mainly by FMCG (fast moving consumer goods), agri business and paperboards, paper and packaging, its gross revenue for the quarter soared to Rs11,340.15 crore, up by 15.1% from Rs9,852.74 crore in the corresponding period last year.

Private life insurer HDFC Life Insurance Co Ltd closed the nine month period with a net profit of about Rs913 crore, said a top company official, against Rs762 crore registered for the earlier corresponding nine month period. HDFC Standard Life Insurance Company shares closed at Rs372.00, down 3.09% on the NSE.

Budget airline IndiGo said its flight from Lucknow to Jaipur returned after take-off after the pilot noticed high vibration in the engine. "The pilot observed high vibration on engine number 2. As a precaution, he returned the aircraft to Lucknow," a company statement added. InterGlobe Aviation shares closed at Rs1,111.00, down 0.86% on the NSE.

Hearing an appeal by ArcelorMittal for early resolution of bankrupt Essar Steel, the National Company Law Appellate Tribunal (NCLAT) on Wednesday ordered its Ahmedabad Bench to pass the verdict in the case by January 31. Failing which, the two-member bench of NCLAT headed by Justice S.J. Mukhopadhyay said it would call the matter and pass an order at its next hearing. The appellate tribunal has asked for the matter to be listed for next hearing on February 4. ArcelorMittal's Rs42,000 crore resolution plan was approved by the Committee of Creditors (CoC) to Essar Steel last October and has been waiting for the Ahmedabad NCLT's approval. The next hearing on the matter by the Ahmedabad Bench is on January 31. Essar Shipping shares closed at Rs12.15, down 0.82% on the NSE.

The top gainers and top losers of the major indices are given in the table below:

The closing values of the major Asian indices are given below: The Total Investment & Insurance Solutions

Major Indices (The Total Investment & Insurance Solutions)