Investors will hope that the market finds support soon lest we witness a sell-off as technical support levels break.
The downward drift seems here to stay. Indian indices closed at their year lows. The Dow wiped out its year-to-date gains. And the hope for now is that the Nifty finds some support around the 8000 levels. So what is causing turbulence in global markets? The Office of Financial Research (US), which monitors risks in the financial sector is perhaps clueless. Liquidity appears to have become “increasingly brittle” in U.S. and European bond markets, Richard Berner, director of the Office of Financial Research, was quoted as saying.
The outlook is a weak start. Investors will hope that the market finds support soon lest we witness a sell-off as technical support levels break. Post May expiry, the Nifty has added ~0.50cr shares in OI, a jump of 37% leading to a drop of 3.3%. Nifty and BankNifty VWAP for current month stands at 8270 and 18083. On a general basis, movement in Nifty is plus or minus 300-400 points from VWAP levels, indicating market may remain range bound between 7870 and 8570 for Nifty in the near term.
The US markets ended weak with the Dow shedding 0.5% as it turned negative for the year. Nasdaq lost almost a percent. Asian markets are in the red for now. But a lot of attention will be on China. On Wednesday, MSCI Inc. is set to announce whether it will include China’s top yuan-denominated stocks into its Emerging Markets Index. Should that happen, it could lead to some capital moving to Shanghai blue chips. Funds like Vanguard Group Inc are reportedly planning to buy Chinese equities ahead of the MSCI decision.
The RBI on Monday empowered banks to take control of a company if it fails to meet specific milestones under the corporate debt restructuring (CDR) plan. Under a new strategic debt restructuring (SDR) scheme, banks, as majority owners, can then find professionals to run the company and then divest stake in order to recover their dues. Wipro is mulling a takeover bid for Equiniti, the British-based group which manages the pensions of millions of UK civil servants, said media reports. With banks tightening financing norms for the gems and jeweller`y industry, the stocks in this segment could see some pressure.
Indian economy is witnessing "stable growth momentum" and mixed trends are seen in other parts of the world including China and the US, according to OECD. The deep depression over east central Arabian Sea further moved north-northwestwards and has intensified into a cyclonic storm (named as: ASHOBAA). It is about 590 km west-southwest of Mumbai. It is further expected to move north-northwestwards to intensify into a severe cyclonic storm during next few hours.
The Ministry of Environment and forests headed by Prakash Javadekar has granted environment clearance for 35-km coastal road connecting south and north Mumbai, according to reports.A report says that the project is expected to cost over Rs 8500 crore that involves reclamation of the coast. Maharashtra Chief Minister Devendra Fadnavis tweeeted, "Coastal road will decongest the traffic of Mumbai & will create 91 hectares of green spaces. Taking Mumbai infra to next standard". The draft notification will come out by 15th June while the final notification by 15th August, Fadnavis tweeted. In the face of slow global demand for merchandise, India’s exports in the current financial year are likely to stay flat or may even move backward of USD 310 billion, the figure achieved in 2014-15, according to an assessment made by ASSOCHAM.
Kaveri Seed has announced that it has received shareholder nod to Increase FII Limit up to 49%. PSU Banking stocks were the major losers. State-owned Punjab National Bank was the top loser in the Nifty-50, down 3.8% at Rs. 138. Union Bank of India, Oriental Bank of Commerce and Canara Bank were the other major losers - down nearly 5% each at Rs. 147, Rs. 181 and Rs. 295, respectively. Bank of India and IDBI shed 4% each. Bank of Baroda, Andhra Bank and Allahabad Bank dropped around 3% each. PSU major - SBI was down over a percent at Rs. 255.
Cairn India was the other major loser in the Nifty-50, down 3.7% at Rs. 180 in the backdrop of fresh fall in Crude Oil prices. Vedanta also extended its losses, down 3% at Rs. 177 following the recent stake transfer of Cairn India. Nestle India plunged another 8% to Rs. 5,502 in the backdrop of the recent Maggi row. The company had to withdraw the product from the Indian market following reports of excess usage of lead /monosodium /glutamate in its product. The stock has slumped over 19% in the last four trading days. Sun TV tanked 21.6% to Rs. 279 on fears of possibly losing its broadcasting licence. According to media reports, the Home Ministry has rejected an Information and Broadcasting Ministry's proposal for giving security clearance to 33 television channels of Kalanithi Maran-promoted Sun TV Network. Reports added that this particular move could lead to cancellation of their broadcasting licence.
Wockhardt slumped 4.7% to Rs. 1,309 on reports that over 200 bottles of Captopril tablets and Clarithromycin antibiotic tablets manufactured by the company are being recalled in the US for deviations in current good manufacturing practices norms laid down by US FDA.
Bhushan Steel soared another 17% to Rs. 70.80 after lenders agreed to refinance the company's debt. According to media reports, a joint lenders' forum (JLF) agreed to refinance its Rs. 35,000 crore loans under the so-called 5/25 scheme for infrastructure projects. The stock has surged nearly 41% in the last two trading sessions. GlaxoSmithKline Pharmaceuticals and Sanofi India declined 0.6% and 1% each to Rs. 3,173 and Rs. 3,320, respectively, after the Competition Commission of India (CCI) imposed a fine for collusive bidding in supply of a meningitis vaccine to government for Haj pilgrims. As per reports, GlaxoSmithKline was fined Rs. 60.45 crore, while Sanofi to pay Rs. 3.04 crore in penalty. Reliance Power gained 1.5% at Rs. 45.40 after the company signed a Memorandum of Understanding (MoU) with government of Bangladesh to develop 3,000 MW of power capacity. NIIT added a percent to Rs. 38.85 after the company announced that it has been awarded a five-to-ten year contract to provide managed training services to Statoil, ASA, a Norwegian multinational oil and gas company, headquarter in Stavanger, Norway.
Eros International Media zoomed to a record all-time high at Rs. 531 on reports that investor groups of the company have suggested de-listing the Indian subsidiary to counter 'transfer pricing' and 'subsidy' concerns. The stock finally ended 12% higher at Rs. 495.
Bombay Dyeing & Manufacturing Company jumped to a high of Rs. 65.80 on the back of plans to sell-off its last textile manufacturing unit. According to reports, the company is selling the last of its textile manufacturing units, as competition from the unorganised sector and growing imports from Taiwan, China and Bangladesh have rendered its factory nonviable. The stock, however, ended flat at Rs. 62.30.
Ruchi Soya Industries was up 0.6% at Rs. 42.20 on reports that the company tied-up with Netherlands-based Solidaridad for increasing the palm oil yield in 50,000 acres of land, at an investment of 4.5 million euro (about Rs. 32 crore). The company will invest 55% of the total investment, and the remaining 45% will be invested by its Netherlands partner. Opto Circuits surged over 5% to Rs. 19.15 on reports that its group company, Cardiac Science won nearly $ 23 million as compensation in a Case over Wearable Defibrillator Technology against Zoll.
SpiceJet jumped 2.5% to Rs. 18.60 on talks of the new promoter Ajay Singh plans to infuse fresh capital in the company. Reports also indicated the airline plans to add seven new aircrafts to its fleet.
No comments:
Post a Comment