Sensex leaps on fuel price hike, QE3...Nifty tops 5500
NEW DELHI : The 50-share Nifty index is expected to open higher and may even hit its crucial psychological level of 5,500 on Friday tracking positive global cues after US central bank initiated another aggressive stimulus program to stimulate growth in the world’s largest economy.
At 07:30 a.m., Nifty India stock futures in Singapore were up 105 points at 5,551.50, indicating a strong opening on the domestic market. Investors will keep a close eye on monthly inflation data which will be out later today. OMCs will also be in focus after a Cabinet committee raised price of heavily subsidised diesel by Rs 5/liter on Thursday to balance its fiscal deficit situation.
According to ET Now Poll, WPI inflation for August is expected to come at 6.9 per cent as compared to 6.87 per cent in July 2012. Core inflation which has gone up in the previous month is likely to remain above 5 per cent for the month of August also.
There is ample liquidity in system and with core inflation sustaining above the desired levels, the Central Bank is likely to stick to anti-inflationary stance, say analysts.
Majority of analysts do not expect the Reserve Bank of India (RBI) to cut interest rates in 17 September policy meet.
Sudip Bandyopadhyay, MD & CEO, Destimoney Securities Pvt. Ltd is of the view that if inflation remains at high levels then we have a problem of stagflation and somewhere we have to take policy action to come out of this complete chaos.
“Though, we are not expecting any major policy decision from RBI on Monday, but we will continue to hope against some kind of easing that will come from the central bank which will provide a boost to the market and the industry,” he added.
Rise in diesel prices would directly translate into higher inflation atleast in the short term for the economy. However, putting cap on subsidies was required to bring down the burgeoning fiscal deficit situation of the economy, which most analysts feared might lead to rating downgrade for India.
Ratings agencies Standard & Poor’s and Fitch said earlier this year that a widening deficit had put India on the brink of losing the investment grade status.
Overnight, US stocks ended higher after US Federal Reserve announced to buy $ 40 billion worth of mortgage back securities per month.
“As part of a new round of quantitative easing, the Fed said it would buy $ 40 billion of mortgage debt per month to keep borrowing rates low and would keep its benchmark interest rates “exceptionally low” until the middle of 2015,” Reuters reported.
The Dow Jones industrial average ended up 206.51 points, or 1.55 per cent, at 13,539.86. The Standard & Poor’s 500 Index was up 23.43 points, or 1.63 per cent, at 1,459.99. The Nasdaq Composite Index gained 41.51 points, or 1.33 per cent, to 3,155.83.
Asian shares rose on Friday after the U.S. Federal Reserve announced an aggressive new stimulus plan to revive growth in the world’s largest economy.
“The Fed’s move will likely accelerate the risk-positive momentum at work since the European Central Bank’s bond-buying scheme to get borrowing costs down for euro zone members was approved by Germany’s constitutional court,” said a Reuters report.
Japan’s Nikkei 225 index was trading 1.4 per cent higher at 9125.17 and Hong Kong ‘s Hang Seng index was trading higher at 20,530.12, up 2.4 per cent.
South Korea’s Kospi index was trading 2.4 per cent higher at 1,997.45. China ‘s Shanghai index was trading 0.4 per cent higher at 2,118.12.
Global cues to watch out today:
14th Sep: 11:00, Euro Area Finance Ministers meet in Cyprus
14th Sep: 12:00, India Aug WPI, estimate 6.9%
14th Sep: 14:30, Euro zone Aug CPI, estimate 2.6% YoY
14th Sep: 14:30, Euro zone Q2 employment
14th Sep: 18:00, US Aug CPI, estimate 2% YoY
14th Sep: 18:00, US Aug advance retail sales, estimate 0.8%
14th Sep: 18:45, US Aug industrial production
NSE FNO Cues-Sep 13
Nifty Sep futures closed at premium of 16 points at 5450.7
Nifty Sep futures adds 2.6lk shares in OI
Stock Futures for all series add 47lk shares in OI
Nifty PCR at 1.02 Vs 1.05
Nifty Options-Sep series
Calls
Nifty 5500 call adds 4.8lk shares in OI
Nifty 5600 call adds 13.2lk shares in OI
Nifty 5700 call adds 7.5lk shares in OI
Max OI in Nifty 5600 call with 96lk shares
Puts
Nifty 5300 put adds 4.9lks shares in OI
Nifty 5400 put adds 12.9lk shares in OI
Nifty 5500 put adds 2.2lk shares in OI
Max OI in Nifty 5300 put with 100 lk shares
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