Thursday's session turned out to
be a disaster for the Indian benchmarks which crumbled like a ‘house of cards'
and went on to breach various key technical levels in the over three percent
freefall. The frontline indices which appeared to be on a southbound journey,
desperately kept searching for a bottom through the session, but to no avail as
the journey only halted with the session's close. Sentiments got undermined
after US Federal Reserve chair Janet Yellen in a testimony to Congress stated
that global economic turmoil and massive sell-off in global equity markets
could spook the US economy, but showed faith in the US economy, rekindling
hopes that there will be further rate hikes during the rest of the year. On the
domestic front, sentiments remained somber with the report that foreign
institutional investors' (FIIs) shareholding in Indian companies dropped to
lowest level in nearly three years at the end of December quarter. Percentage
of FII holding in 1,000-odd companies listed on the NSE stood at 18.67%, lowest
since March 2013. Besides, decline in the rupee coupled with a slide in the
crude oil prices also dented the sentiments. Indian rupee again breached the
68-mark as it fell by 17 paise to 68.02 against the American currency, as the
demand for dollar from banks and importers gathered pace, while Oil prices slid
as record US crude inventories and worries about a global economic slowdown.
Meanwhile, cautiousness ahead of the release of Industrial production figures
for the month of December and Retail inflation data for the month of January,
also kept market-participants on the tenterhooks. On the global front, European
markets made an awful start, while Asian markets ended mostly in the red. Back
home, the benchmark got off to a weak start and the indices breached the
psychological 7,200 and 23,600 levels in the early moments of trade since
investors largely remained influenced by the pessimistic sentiments prevailing
in Asian markets. Thereafter, the frontline indices lost the plot and kept
tumbling down the hill without any stoppage. The steep fall turned even acute
after the opening of European markets in the noon trades, as one negative
report after another from the continent kept creating havoc for the local
bourses. Finally, the BSE Sensex slumped by 807.07 points or 3.40% to 22951.83,
while the CNX Nifty plunged by 239.35 points or 3.32% to 6,976.35.
The US markets closed lower on
Thursday, falling amid a global rout led by tumbling oil prices and losses in
financial stocks. The main indexes tried to stage a comeback in late-afternoon
trade, after the oil minister of the United Arab Emirates stated that the
Organization of the Petroleum Exporting Countries are ready to cooperate on a
production cut. But the remarks, reported by The Wall Street Journal, weren't
enough to sustain the rebound. Remarks from Federal Reserve Chairwoman Janet
Yellen during her second day of testimony on Capitol Hill, meanwhile, didn't
help lift investor sentiment. On the economy front, the number of people who
applied for unemployment benefits in early February fell to the lowest level in
almost two months, a reassuring sign that few workers are losing their jobs
despite a slowdown in hiring. Initial jobless claims declined by 16,000. The
Dow Jones Industrial Average lost 254.56 points or 1.60 percent to 15,660.18,
the Nasdaq was down 16.75 points or 0.39 percent to 4,266.84 while, the S&P
500 was down by 22.78 points or 1.23 percent to 1,829.08.
Crude oil futures continued their
decline and ended at fresh 12-year lows on Thursday, amid a bearish monthly supply
report from OPEC and further indications that a deal between Russia and the
world's largest oil cartel on potential cuts in production will not
materialize. Meanwhile, the US Energy Department's EIA believes worldwide crude
stocks could increase by an average 1 million barrels a day this year even as
non-OPEC crude production dwindles, which also weighed on the sentiments. Benchmark
crude oil futures for March delivery declined by $1.27 or 4.54 percent to $26.14
a barrel after trading in a range of $26.12 and $27.48 a barrel on the New York
Mercantile Exchange. In London, Brent crude for April delivery closed at $29.98,
down by $0.86 or 2.83 percent on the ICE.
India rupee ended substantially
weaker against dollar on Thursday due to strong demand for the American unit
from importers and banks. Despite dollar's weakness against the basket of major
currencies overseas, the domestic currency fell below the crucial 68-mark. The
massive sell off in the Indian and global markets also added to pessimistic environment.
Meanwhile, investors remained cautious ahead of the release of Retail inflation
and IIP data on February 12. Further sentiments got undermined with the report
that India continues to report over 7 per cent GDP growth, but its momentum has
weakened and the country's growth is well ‘below trend'. On the global front,
the dollar hit a 15-month low against the yen after comments from Federal
Reserve Chair Janet Yellen gave investors no reason to change their minds that
the next rate hike will be a long time coming. Finally, the rupee ended at
68.30, 45 paise weaker from its previous close of 67.85 on Wednesday.
The
FIIs as per Thursday's data were net sellers in equity and in debt segments
both. In equity segment, the gross buying was of Rs 3758.97 crore against gross
selling of Rs 4264.18 crore, while in the debt segment, the gross purchase was
of Rs 146.47 crore with gross sales of Rs 395.97 crore.
The US markets despite late day
recovery ended lower in last session, with Dow ending the session at a two-year
closing low. Traders largely shrugged off a report from the Labor Department
showing a bigger than expected decrease in initial jobless claims in the week
ended February 6th. The Asian markets have made mostly a lower start, led by
the Japanese market which is down by around five percent, heading for their
worst week since 2008 as anxiety over central banks' ability to revive the
world economy fueled a rally in the yen. The Indian markets slumped in last
session on global growth worries and weak earnings from some of the major
companies. Today, the start of the final day of the week is likely to remain
weak, however some lower level buying can appear later in the day and markets
will see some recovery after deep gash of last session. Traders are likely to
get some support with Reserve Bank of India (RBI) Governor Raghuram Rajan's
statement that the ongoing clean-up of bank balance sheets will help spur
economic growth and improve the lenders' profitability. He has also said that
while the profitability of some banks may be impaired in the short-run, the
system, once cleaned, will be able to support economic growth in a sustainable
and profitable way. Also, the RBI assured banks that it would inject adequate
cash in view of the tight liquidity conditions in the market. Meanwhile, India
Ratings and Research has said that the country needs to raise its labour
productivity growth to 7.3 percent to attain a GDP growth rate of 9 percent.
There will be lots of major companies reporting their numbers that will keep
the markets buzzing for the day.
Support
and Resistance: NSE Nifty and BSE Sensex
Index
|
Previous close
|
Support
|
Resistance
|
CNX Nifty
|
6976.35
|
6887.98
|
7136.68
|
BSE Sensex
|
22951.83
|
22654.48
|
23503.82
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
SBI
|
727.50
|
154.25
|
148.47
|
163.77
|
ICICI Bank
|
289.25
|
199.25
|
195.85
|
204.80
|
Tata Motors
|
216.33
|
276.35
|
261.43
|
295.63
|
Bank of Baroda
|
170.89
|
115.95
|
111.87
|
120.82
|
Vedanta
|
166.14
|
62.30
|
60.20
|
65.70
|
-
Bank of India has reported a net loss of Rs 1505.58 crore for the quarter ended December 31, 2015 as compared to net profit of Rs 173.38 crore for the same quarter in the previous year.
Outbidding competitors in an open global tender, Bharat Heavy Electricals has bagged order for the supply of two 800 MW Steam Generators with supercritical parameters.
Cipla has reported 11.03% fall in its net profit at Rs 265.98 crore for the quarter ended December 31, 2015 as compared to Rs 298.95 crore for the same quarter in the previous year.
Diversified conglomerate ITC is exploring possibility to enter into the branded frozen foods segment.
Tata Motors has reported 16% increase in its global sales, including that of Jaguar Land Rover vehicles, at 93,355 units in January as compared to 80,499 units sold in January 2015.