Indian benchmark indices extended
their downfall for second consecutive day on Wednesday and finished the choppy
day of trade with a cut of over half a percent on account of sustained selling
by investors amid the dismal earnings by some blue-chip companies. Auto major
Tata Motors slipped as much as ten percent after the company reported 96.22%
fall in its consolidated net profit at Rs 111.57 crore for the quarter ended
December 31, 2016, as compared to Rs 2952.67 crore for the same quarter in the
previous year. India's largest drug maker Sun Pharmaceutical Industries
declined over four percent after the company reported 4.73% drop in its
consolidated net profit at Rs 1471.82 crore for Q3 FY17, as compared to Rs
1544.85 crore for the same quarter in the previous year. Further, investors
turned jittery after the US Federal Reserve Chair Janet Yellen hinted at a
likely rate hike in the forthcoming policy review. In her semi-annual monetary
policy testimony before the Senate Banking Committee, Yellen said that the Fed
will probably need to raise interest rates at an upcoming meeting in March and
that delaying rate increases could leave the Fed's policymaking committee
behind the curve. On the domestic front, sentiments remained dismal as India
Ratings (Ind-Ra) cautioned the government that its strategy to revive economic
growth by focusing on infrastructure may not yield results unless real estate
and manufacturing sectors recover. Revising down economic growth by one
percentage point to 6.8% from earlier 7.8% for the current financial year, due
to demonetisation, the rating agency pegged economic expansion in the next
financial year to 7.4%. Some market participants remained on the sidelines and
refrained from any buying activity, ahead of the 10th meeting of the
all-powerful GST Council this weekend, where a critical anti-profiteering
clause in the draft Goods and Services Tax law to ensure that the benefit of
lower taxes gets shared with consumers is likely to be finalized. Meanwhile,
banking stocks came under pressure on the private report that India may cut the
amount of capital it plans to inject into state-controlled lenders this fiscal
year by as much as Rs 7,800 crore ($1.2 billion) because of slow loan growth. Finally,
the BSE Sensex declined by 164.71 points or 0.58% to 28174.60, while the CNX
Nifty was down by 67.60 points or 0.77% to 8,724.70.
The US markets closed higher on
Wednesday, for the fifth session in a row, marking the longest record-setting
streak for all three benchmarks since January 1992, as President Donald Trump
promised a massive tax plan in the not-too-distant future. Trump's latest
comments echo his pledge last week to deliver a phenomenal tax plan that would
be revealed soon. Meanwhile, Federal Reserve Chairwoman Janet Yellen appeared
to reinforce the market's optimism when she testified in front of the Senate
Banking Committee that investors are expecting a more growth-supportive fiscal
policy and a boost corporate earnings. On the economy front, most US retailers
posted strong sales in January, even beleaguered department stores, perhaps a
sign that higher consumer confidence since the election has encouraged
Americans to spend more for now. Retail sales rose 0.4% last month following a
much bigger gain in December than originally reported. The Dow Jones Industrial
Average added 107.45 points or 0.52 percent to 20,611.86, the Nasdaq was up
36.87 points or 0.64 percent to 5,819.44, while S&P 500 gained 11.67 points
or 0.50 percent to 2,349.25.
Crude oil futures settled lower
on Wednesday after government data confirmed U.S. inventories at record highs. The
Energy Information Administration (EIA) said US stockpiles rose 9.5 million
barrels last week. Gasoline stocks rose 2.8 million barrel and distillate
stockpiles fell by 689,000 barrels. Total inventories are at an all-time peak
of 518.12 million barrels, while gasoline stocks also touched a record. The
builds come against more upbeat estimates of reduce oil output globally. Benchmark
crude oil futures for March delivery was down by $0.09 or 0.16 percent to $53.11 on
the New York Mercantile Exchange. In London, Brent crude for March delivery
ended lower by 0.39 percent at $55.75 on the ICE.
Indian
rupee ended marginally stronger against the US dollar on Wednesday on fresh
selling of American currency by banks and exporters. Domestic currency got some
support with India Ratings and Research (Ind-Ra) latest report that the Indian
economy is likely to grow by 7.4 percent in the next fiscal year. However,
there was some cautiousness too with the US Federal Reserve Chair Janet Yellen
hint at a likely rate hike in the forthcoming policy review. In her semi-annual
monetary policy testimony before the Senate Banking Committee, Yellen said that
the Fed will probably need to raise interest rates at an upcoming meeting in
March and that delaying rate increases could leave the Fed's policymaking
committee behind the curve. Besides, a weak domestic equity market too kept
pressure on the domestic currency. Finally, the rupee ended at 66.91, 1 paise
stronger from its previous close of 66.92 on Tuesday.
The
FIIs as per Wednesday's data were net sellers in equity segment, while they
were net buyers in debt segment. In equity segment, the gross buying was of Rs
4397.88 crore against gross selling of Rs 4414.31 crore, while in the debt
segment, the gross purchase was of Rs 1908.56 crore with gross sales of Rs
841.88 crore.
The US markets moved further high
in last session extending the upward trend seen in recent sessions, following
the release of a slew of economic data, including a Commerce Department report
showing stronger than expected retail sales growth. The Asian markets have made
mostly a lower start with some indices trading down by over half a percent in
early deals. The Japanese market was trading lower as the yen jumped and the
dollar slipped against most major currencies. The Indian market giving up their
early gains ended with sharp cuts in last session as the traders turned jittery
on US Fed's hint of an early rate hike. Today, the start is likely to remain
cautious on mostly soft regional cues, traders however will be getting some
support with report that India's exports continued to grow for the fifth
straight month, expanding by 4.32 percent to $ 22.11 billion in January against
$ 21.19 billion in the same month of 2016. Imports also rose, by 10.70 percent
to $ 31.95 billion, during the month under review. There will be some support
with oil prices softening and weakness in dollar against all other currencies.
There will be some action in the oil & gas sector, as the Cabinet Committee
of Economic Affairs approved the award of 31 contract areas under the Discovered
Small Field (DSF) Bid Round 2016. The government expects to monetise 40 million
tonnes of oil and 22 billion cubic metres (BCM) of gas reserves over 15 years
through the awarding of contracts. There will be buzz in the PSU banking stocks
specially SBI and its associate banks as the nion Cabinet has approved a
proposal to merge the five subsidiaries of State Bank of India with the parent,
kickstarting consolidation among public sector lenders.
Support and Resistance: NSE (Nifty)
and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8724.70
|
8689.07
|
8784.12
|
BSE Sensex
|
28155.56
|
28044.42
|
28324.51
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
Tata Motors
|
386.38
|
436.45
|
429.53
|
448.18
|
Tata Motors DVR
|
144.84
|
268.30
|
263.03
|
277.73
|
Bank of Baroda
|
131.76
|
163.20
|
160.50
|
168.15
|
ICICI Bank
|
131.10
|
280.75
|
277.43
|
285.23
|
SBI
|
122.01
|
268.95
|
266.50
|
271.95
|
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