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08 February
2019
I had
mentioned in last week’s closing report that Nifty, Sensex might head higher.
The major indices of the Indian stock markets were range-bound during the week
and closed with minor weekly gains on Friday over last Friday’s close. The
trends of the major indices in the course of the week’s trading are given in
the table below:
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.
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.
The
major indices of the Indian stock markets were range-bound on Tuesday and
closed with minor gains over Monday’s close. On the NSE, there were 548
advances, 1,213 declines and 297 unchanged.
Ahead
of a three-day RBI monetary policy review meet, set to start later in the day,
Sensex and Nifty logged mild gains on Tuesday. Capital goods, FMCG (fast moving
consumer goods) and metal stocks declined while energy, IT (information
technology) and banking stocks surged. At 2.54 p.m., the S&P BSE Sensex
traded 78.22 points or 0.21% up from its previous close of 36,582.74 after
touching a high of 36,727.83 and a low of 36,495.83. The broader Nifty traded
at 10,935.35, up 23.10 points or 0.21%. Stock-wise, IndusInd Bank, Bajaj-Auto,
HeroMotor Corp, Mahindra and Mahindra and Maruti Suzuki gained in the range of
1% to 3%. In contrast, Tata Motors, Tata Motors (DVR), Tata Steel, Coal India
and ONGC declined in the range of 1% to 3%.
Moody's
downgraded the senior unsecured rating for Airtel and backed senior unsecured
notes issued by subsidiary Bharti Airtel Int'l (the Netherlands) to 'Ba1', or
junk rating, from 'Baa3'. The American rating agency also withdrew the
company's 'Baa3' issuer rating and said the outlook was negative.
Budget
airlines SpiceJet said it will launch a daily non-stop flight service between
Hyderabad and Saudi Arabia's Jeddah from March 25. According to the airline,
Jeddah will be its ninth international destination and third destination in the
Middle East. The airline said that it will service the route using its new 189
seater Boeing 737 MAX aircraft. "The new service will enable SpiceJet to
provide over 2500 seats per week on the sector," the airline said in a
statement. "To mark this important launch, SpiceJet has announced a
special fare of Rs13,499 (all-inclusive) for Hyderabad-Jeddah and Rs10,799 (all
inclusive) for Jeddah-Hyderabad."
Exide
Industries posted a net profit of Rs155.04 crore in the third quarter of the
current fiscal, up marginally as against Rs154.27 crore in the same period last
year. Its net turnover for the quarter under review was at Rs2,496.84 crore, up
by 9.59% from Rs2,278.29 crore in the corresponding quarter of the previous
fiscal. The battery maker's Managing Director and CEO G. Chatterjee said that
volumes in automotive, motorcycles, UPS and solar batteries in the third
quarter have grown quite well. The company is focusing on cost control and
technology upgradation as strategies to improve the bottom-line.
Amid
mixed global markets and healthy quarterly results of index heavyweights, key
equity indices by over 1%, during the late afternoon session of the trade on
Wednesday. In addition, the equity indices also gained as both the foreign
institutional investors (FIIs) and domestic institutional investors (DIIs) were
net buyers on Tuesday. FIIs bought stocks worth Rs420.65 crore while the DIIs
bought stocks to the tune of Rs194.31 crore.
Investors
will also be keeping an eye on the Reserve Bank of India's (RBI) bi-monthly
monetary policy outcome scheduled on Thursday. Expectations of rate cut along
with some healthy quarterly results, lifted the key equity indices on
Wednesday. Tata Steel spurted by 4.08% while Bajaj Finance gained 3.54%.
Credit
rating company Fitch Ratings has placed India's Tata Motors credit rating on
negative watch. The rating agency pointed at increasing risks for Tata Motors’
British luxury car unit - Jaguar Land Rover (JLR) - over a potentially chaotic
Brexit. “Trade barriers and logistic issues from a disorderly Brexit could have
an impact on JLR’s competitive positioning and lead to significantly lower
sales and profitability,” the credit rating agency said.
As
a part of their asset monetisation plan to repay debt, promoters of Zee
Entertainment Enterprises Ltd (ZEEL) are open to sell over 50% of their
holdings in the firm and are in talks with more than two investors for the
same, a senior company official said.
The
Indian equity market bounced back into the green, after falling more than 140
points during the late-afternoon trade session on Thursday. The abrupt downfall
in the market's trajectory came after both the indices -- S&P BSE Sensex
and NSE Nifty50 -- rose on the back of a surprise move by the Reserve Bank of
India (RBI) to go for a rate cut. At around 2 p.m., the BSE Sensex traded at
37,100.88 points, higher by 125.65 points or 0.34% from the previous close of
36,975.23 points. It touched an intra-day high of 37,172.18 and a low of
36,915.13. The NSE Nifty50 on the National Stock Exchange traded higher by
36.95 points or 0.33% at 11,101.55, from the previous close of 11,062.45
points. Interest sensitive auto and realty stocks gained around 1%, while the
key banking stocks gained 0.50% as a policy rate cut would lead to lower
interest rates for loan seekers.
In
the final monetary policy review of the current fiscal, the Reserve Bank of
India (RBI) on Thursday lowered its key lending rate for commercial banks to
6.25%.The decision was guided on the basis of an assessment of the evolving
macroeconomic situation wherein headline inflation is projected to soften
further and the economy's growth impulses had moderated, the RBI said. The
central bank was more accommodating, changing its monetary policy stance from
"calibrated tightening" to "neutral".
Private
airline Jet Airways introduced a staggered framework to reward its domestic
guests with substantially lower penalties in exchange for advanced intimation
for changes in their bookings including cancellations, changes. The new policy
would be implemented from February 7. "As part of the new policy, charges
for various changes including those for flight, date, sector, booking class,
cabin and others and refund penalties for ticket cancellations at least seven
days prior to the date of travel would attract lower penalties compared to
those who undertake booking changes within seven days," Jet Airways, said
in a statement. "The dynamic penalties will reward guests who plan in
advance with substantial savings," it added.
The
benchmark Sensex made losses on Friday owing to a steep decline in auto stocks
led by Tata Motors and broadly negative global cues. Apart from realty, teck
and telecom stocks all the sectors on the BSE came under heavy selling. Auto
stocks declined by 2.75%. Globally, investors reacted negatively after US
President Donald Trump said he would not meet his Chinese counterpart Xi
Jinping ahead of a trade deal deadline on March 2, when American tariffs on
Chinese products were slated to increase. Stock-wise, Kotak Mahindra Bank,
Bajaj Finance, HDFC Bank, HCL Tech and Bharti Airtel were the top gainers on
Sensex. In contrast, Tata Motors slipped 17.69% while the Tata Motors (DVR)
declined over 13%, after the company reported a massive loss in its third
quarter results declared on Thursday. Among the other laggards were Vedanta,
Larsen and Toubro, Tata Steel and ONGC.
Automobile
major Tata Motors Group reported a massive net loss of Rs26,961 crore for the
quarter ended December 31, 2018. The automobile group had posted a net profit
of Rs1,214.60 crore for the corresponding period of the previous year.
According to the group, its net profit was impacted by an exceptional item of
"Asset Impairment" in JLR (Jaguar Land Rover) worth Rs27,838 crore
(3.1 billion pounds). On JLR, it said: "Performance impacted by
challenging market conditions particularly in China and inventory corrections.
Continue to invest in exciting products and leading edge technologies."
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