Nifty Seen Rangebound Ahead Of Long Vacation
Sensex closed flat with a gain of 33 points after roller-coaster ride influenced by the RBI credit policy. However, Sensex and Nifty are marking their fourth consecutive quarterly gain. The Nifty rose only 0.07% for September but still ended up 4.64% for the September quarter. The Sensex fell 0.03% for the month but advanced 4.8% for the quarter.
RBI left all key rates unchanged citing increased risks to inflation and difficult external situation especially on the geopolitical front. This is the fourth consecutive time that the RBI has kept key interest rates unchanged despite clamors from the industry to cut rates to boost economy. Meanwhile, the RBI has eased norms for importers for hedging foreign exchange risk. The central bank has raised the eligible limit for importers under the past performance route to 100% from the existing 50% i.e., importers can hedge up to 100% of the average of past three years' import turnover or the preceding year's import turnover, whichever is higher, subject to compliance with other conditions applicable for hedging under this route.
Led by healthy growth in coal, cement and electricity sectors, the eight core industries grew by 5.8% in August this year against 4.7% in the same month last year. The July core sector data was 2.7%. Coal, cement and electricity grew by 13.4%, 10.3% and 12.6% respectively last month on Y-o-Y basis. The August figures would have positive impact on overall industrial production as the eight core sectors has a combined weight of about 38% in the Index of Industrial Production (IIP).
Public sector oil marketing companies have cut petrol prices, while leaving diesel untouched. The companies have also announced a cut in the price of non-subsidised domestic LPG cylinders. In Delhi, petrol will now be sold at Rs 67.86 a litre. Petrol prices have continued to show a downward trend. The current levels of international oil prices and the rupee-dollar exchange rate warrant a decrease in the selling price of petrol in the domestic market,” said Indian Oil, in a statement. The corresponding decrease in Mumbai is Rs 0.68 a litre and petrol will now cost Rs 75.73 a litre in that city. In Kolkata, the revised price is Rs 75.46 a litre, lower by Rs 0.68, and in Chennai the new price is Rs 70.87 per litre, lower by Rs 0.68 a litre.
Globally, Wall Street stocks have finished lower following disappointing economic data, including a big drop in US consumer confidence. On the final day of the third quarter, the Dow Jones Industrial Average closed at 17,042.90, down 28.21 points (0.17%). The S&P 500 fell 5.51 (0.28%) to 1,972.29, while Nasdaq Composite Index shed 12.46 (0.28%) to 4,493.39. Despite Tuesday's drops, all three indices finished with quarterly gains.
European stocks have diverged, with eurozone markets boosted by hopes of fresh stimulus from the ECB after weak inflation data, while the single currency hit a two-year low. The Stoxx Europe 600 index rose 0.6%. DAX index gained 0.55% to end at 9,474.30 points and CAC 40 climbed 1.33% to end at 4,416.24 points. However, FTSE 100 index fell 0.36% to end at 6,622.72 points. In Europe, all eyes were on the ECB ahead of its meeting on Thursday.
Japanese shares rose, with the Topix index reversing earlier losses, as the yen weakened for a fourth day and local companies indicated they may boost investment by the most since 2007. The Topix added 0.2% to 1,328.61, reversing an earlier loss of 0.3%. The Nikkei 225 Stock Average rose 0.1% to 16,193.33. The yen lost 0.2 percent to 109.63 per dollar, sliding for a fourth trading day. China starts a week-long holiday to mark National Day and markets will reopen day next Wednesday. Hong Kong markets are closed Wednesday and Thursday. China’s manufacturing growth remains flat. The CFLP PMI came in at 51.1, above an expected 51.0, and even with August's 51.1.
In Indian Market, Today, the last trading session of the week ahead of long vacation. A SGX Nifty Index future is trading at flat with decline by 0.20% to 7972.5. Auto stocks will remain in focus as top automakers will report their sales data for September. We expect Nifty may trade in a range bound after flat opening for Indian equities today.