 "Markets end flat as rising CPI dashes rate-cut hopes")
Benchmark share indices ended flat with a negative bias with financials leading the decline after rising consumer price inflation dampened hopes of a rate-cut by the Reserve Bank of India.
However, the downside was capped after Wholesale Price Index (WPI) eased further in the month of June.
The barometer index, S&P BSE Sensex ended at 27,933, down by 28 points and the 50-share Nifty ended 6 points down at 8,454.
The Indian rupee was trading marginally higher at 63.47 against the US dollar compared to the previous close of 63.51.
EXPERT VIEW
According to Mudit Goyal, Technical Analyst, SMC Global Securities ,“After testing, all time high of 9100 levels in early March, Nifty witnessed a decent correction from higher levels and traded in downward sloping channel on the daily charts and also gave the breakout of same in late June 2015. Despite the global sell off on the back of Greece and China crisis, Indian markets showed decent recovery from lower level and strictly traded around 8300-8400 levels with positive bias. “
He further said, “In fact on charts, Nifty continuously traded above the breakout of downward sloping channel, which suggests the momentum of broader markets is highly positive. I would suggest that every correction or dip should be considered as buying opportunity for near term. Nifty may test the level of 8580-8620 levels in the short term.”
CRUDE OIL
The global crude oil prices edged lower as Iran and six global powers reached a consensus and clinched the Iran nuclear deal. The historic deal would increase the oil supply in the market that is already overloaded with supply. The drop in oil prices has put pressure on currencies and commodity related shares.
ECONOMY
The Consumer Price Index (CPI) data, which was released post market hours on Monday, revealed that the inflation for the month of June rose to a nine-month high to 5.40%. This shot in the retail prices is food driven, which increased to 5.48% from 4.8% in May.
The Wholesale Price Index (WPI) fell to -2.4% in June, continuing its deflationary mode, led by downward fuel prices and lower commodity prices. This is the eighth staight decline.
The Index of Industrial Production (IIP) numbers for the month of May, released on Friday, showed a slowdown in the industrial activity weighed by manufacturing sector. The IIP for the month of May was 2.7%
SECTORS & STOCKS
Sectorally, BSE Auto index ended down by 0.9% followed by BSE Bankex , down by 0.5%. BSE Pharma and BSE IT indices ended with higher between 0.6-0.9% each.
The rising CPI numbers, which could put hold on the easing of monetary policy by the RBI, have put pressure on rate sensitive stocks. Among the banking shares, SBI lost 1.8% while HDFC twins and ICICI bank dropped between 0.3-0.7%.
Tata Motors plunged over 4% as its luxury arm- Jaguar land Rover (JLR) reduced its sales in China on concerns of a slowdown in the Chinese economy.
Index heavyweight ITC finished lower by 0.8% on the back of an increase in the inflation numbers. HUL shares however finished with 1.9% gains.
The fall in the crude prices led to a surge in the public sector oil marketing companies. HPCL, BPCL, IOC gained between 2-3% while index heavyweight Reliance Industries and ONGC slipped 1% and 0.4% respectively.
Dr Reddy’s Laboratories gained 0.5% after the drug manufacturer announced the launch of Memantine hydrochloride tablets of 5 mg and 10 mg.
Aurobindo Pharma ended flat after intraday gains of over 1% on the BSE. The company received final approval from the US Food and Drug Administration (UFDA) to produce and sell Flecainide Acetate Tablets -- used for regulating heart rate -- in the American market.
From the metal pack, Vedanta and Hindalco dropped 1.6% and 1.8% respectively on account of profit –booking.
On the flip side, Coal India was the highest gainer on the Sensex as it surged 3.3% while Infosys, Wipro, Lupin, Hero Motocorp, and BHEL finished higher between 1-2%
Among other shares, shares of India Cements fell 3.7% on the BSE after the Supreme Court appointed panel suspended Chennai Super Kings (CSK), a team owned by India Cements, for two years from playing in the Indian Premier League (IPL) on charges of fixing.
Shares of DCB Bank dipped 7% on the BSE, on the back of a disappointing first quarter. The private sector lender reported an increase in the gross net performing assets (NPA) to 1.96% in the June 2015 quarter (Q1) as against 1.78% at the end of June 2014 quarter.
Jet Airways finished higher by 4% on the BSE after the company increased its daily seat deployment on the domestic network by 1,000 seats along with the addition of new services to enhance the connectivity within the country.
However, the downside was capped after Wholesale Price Index (WPI) eased further in the month of June.
The barometer index, S&P BSE Sensex ended at 27,933, down by 28 points and the 50-share Nifty ended 6 points down at 8,454.
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The broader market, however, outperformed their larger peers with BSE Mid-cap and Small-cap indices ending at 0.14% and 0.36% respectively. The overall health of the market was positive with 1,551 gainers and 1,285 losers on the BSE.
The Indian rupee was trading marginally higher at 63.47 against the US dollar compared to the previous close of 63.51.
EXPERT VIEW
According to Mudit Goyal, Technical Analyst, SMC Global Securities ,“After testing, all time high of 9100 levels in early March, Nifty witnessed a decent correction from higher levels and traded in downward sloping channel on the daily charts and also gave the breakout of same in late June 2015. Despite the global sell off on the back of Greece and China crisis, Indian markets showed decent recovery from lower level and strictly traded around 8300-8400 levels with positive bias. “
He further said, “In fact on charts, Nifty continuously traded above the breakout of downward sloping channel, which suggests the momentum of broader markets is highly positive. I would suggest that every correction or dip should be considered as buying opportunity for near term. Nifty may test the level of 8580-8620 levels in the short term.”
CRUDE OIL
The global crude oil prices edged lower as Iran and six global powers reached a consensus and clinched the Iran nuclear deal. The historic deal would increase the oil supply in the market that is already overloaded with supply. The drop in oil prices has put pressure on currencies and commodity related shares.
ECONOMY
The Consumer Price Index (CPI) data, which was released post market hours on Monday, revealed that the inflation for the month of June rose to a nine-month high to 5.40%. This shot in the retail prices is food driven, which increased to 5.48% from 4.8% in May.
The Wholesale Price Index (WPI) fell to -2.4% in June, continuing its deflationary mode, led by downward fuel prices and lower commodity prices. This is the eighth staight decline.
The Index of Industrial Production (IIP) numbers for the month of May, released on Friday, showed a slowdown in the industrial activity weighed by manufacturing sector. The IIP for the month of May was 2.7%
SECTORS & STOCKS
Sectorally, BSE Auto index ended down by 0.9% followed by BSE Bankex , down by 0.5%. BSE Pharma and BSE IT indices ended with higher between 0.6-0.9% each.
The rising CPI numbers, which could put hold on the easing of monetary policy by the RBI, have put pressure on rate sensitive stocks. Among the banking shares, SBI lost 1.8% while HDFC twins and ICICI bank dropped between 0.3-0.7%.
Tata Motors plunged over 4% as its luxury arm- Jaguar land Rover (JLR) reduced its sales in China on concerns of a slowdown in the Chinese economy.
Index heavyweight ITC finished lower by 0.8% on the back of an increase in the inflation numbers. HUL shares however finished with 1.9% gains.
The fall in the crude prices led to a surge in the public sector oil marketing companies. HPCL, BPCL, IOC gained between 2-3% while index heavyweight Reliance Industries and ONGC slipped 1% and 0.4% respectively.
Dr Reddy’s Laboratories gained 0.5% after the drug manufacturer announced the launch of Memantine hydrochloride tablets of 5 mg and 10 mg.
Aurobindo Pharma ended flat after intraday gains of over 1% on the BSE. The company received final approval from the US Food and Drug Administration (UFDA) to produce and sell Flecainide Acetate Tablets -- used for regulating heart rate -- in the American market.
From the metal pack, Vedanta and Hindalco dropped 1.6% and 1.8% respectively on account of profit –booking.
On the flip side, Coal India was the highest gainer on the Sensex as it surged 3.3% while Infosys, Wipro, Lupin, Hero Motocorp, and BHEL finished higher between 1-2%
Among other shares, shares of India Cements fell 3.7% on the BSE after the Supreme Court appointed panel suspended Chennai Super Kings (CSK), a team owned by India Cements, for two years from playing in the Indian Premier League (IPL) on charges of fixing.
Shares of DCB Bank dipped 7% on the BSE, on the back of a disappointing first quarter. The private sector lender reported an increase in the gross net performing assets (NPA) to 1.96% in the June 2015 quarter (Q1) as against 1.78% at the end of June 2014 quarter.
Jet Airways finished higher by 4% on the BSE after the company increased its daily seat deployment on the domestic network by 1,000 seats along with the addition of new services to enhance the connectivity within the country.