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04
February 2019
I had
mentioned in Friday’s closing report that Nifty, Sensex might head higher. The
major indices of the Indian stock markets were range-bound on Monday and closed
with gains over Friday’s close. On the NSE, there were 483 advances, 1,298
declines and 308 unchanged. The trends of the major indices in the course of Monday’s
trading are given in the table below:
Sensex
and Nifty traded on negative note during the afternoon session of the trade
over concerns of fiscal slippage and owing to volatility in specific stocks.
FMCG (fast moving consumer goods), healthcare and auto stocks witnessed selling
pressure, while the key banking and finance stocks reversed early losses and
traded in the green.
The
stock price of Reliance Communications (RCOM) declined up to 48% after it filed
for bankruptcy. Market fears a fiscal slippage because of various announcements
in the interim budget, like the higher borrowing programs by the government.
The government's estimate of GST collection in FY19 is on the higher side. The
nominal GDP growth rate of 11.5% is also difficult to achieve, according to
market analysts. In addition the bond market is not happy with the Interim
Budget hence having a negative impact on the investors.
Two-wheeler
major Hero MotoCorp reported a decline of 9.15% in its sales for January 2019.
According to the company, sales during last month declined to 582,756 units
from 641,501 units reported for the corresponding month of last year. "The
weak market sentiment from the previous quarter spilled over to January and
continued to dampen sales. The industry has been witnessing lower retail
off-take in the past few months due to multiple factors, like the credit crunch
and higher two-wheeler insurance costs," the company said in a statement.
"However, the customer sentiment has begun to improve in the past two
weeks, and the company expects sales to pick-up in this quarter, which has
traditionally been a phase of positive sales." As per the company's
statement the Interim Budget - with the direct benefit scheme for the farmers
and the income tax exemptions for a portion of the middle class - will drive
consumption and help the rural economy, thereby giving a boost to the
two-wheeler industry. Hero MotoCorp shares closed at Rs2,801.50, down 0.20% on
the NSE.
For
the week ahead, the key drivers would be outcome of the RBI's monetary policy
meeting, corporate results and sustainability of FII (foreign institutional
investors) flow. The RBI policy on February 7 and the remaining earnings
announcements for the December quarter would dictate trend of the market,
according to market analysts. The Monetary Policy Committee (MPC) is scheduled
to meet from February 5 to 7 for the sixth and final bi-monthly monetary policy
review for 2018-19. The MPC had kept the key lending rates unchanged. FIIs have
bought Rs4,300 crore stocks in the cash segment during the last two trading
days. Coal India, Cipla, BHEL, SAIL, Tata Motors, Mahindra and Mahindra, Bharat
Petroleum Corporation, Vodafone Idea and Tata Steel are expected to announce
quarterly financial results in the coming week.
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 in the table below: The Total
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Major Indices (The Total
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