Indian stock markets witnessed a fairly stable day of trade on Thursday as sanguinity got reinforced after minutes of the US Federal Reserve meeting signaled no interest rate hikes in the near term and raised hopes that the pace of foreign inflows into the domestic market would continue.  Sentiments remained optimistic for most part of the session as Jharkhand becoming the third state to ratify the Goods and Services Tax Amendment Bill in a special session of the Legislative Assembly. The state of Assam and Bihar had already passed the GST Bill. The government has set a deadline of April 2017 for its rollout. Also, a new UN report which calls for more transparent policies if the country aspires to become a global driver of innovation, has ranked India 66th in a list of most innovative economies, a jump of 15 places from last year.  Some support came with Moody's report on emerging market highlighting that India is seeing gradual progress on reforms and the country's outlook will largely be determined by domestic factors. The report maintained Gross Domestic Product (GDP) growth forecast for India at 7.5% adding that India now seems less vulnerable than it used to be. However, market participants remained cautious with the private report indicating that headline inflation is expected to continue its rally through the rest of this fiscal, while WPI is likely to average 3.9 per cent, CPI will average close to 5 per cent in 2016-17.  Meanwhile, mild buying witnessed in selected Steel makers with a Moody's report that steel demand in India will outpace the regional average, while the profitability of domestic steel companies will outperform regional peers on account of an increase in domestic demand. On the global front, Asian markets ended mostly higher on Thursday, while European shares rose for the first time in a week. Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. Thereafter, the frontline indices soon capitalized on the momentum and touched intraday highs in late morning session but the indices failed to hold onto the highs on account of profit booking in few sectors. Finally, the BSE Sensex gained 118.07 points or 0.42% to 28123.44, while the CNX Nifty rose by 49.20 points or 0.57% to 8,673.25.

 

The US markets ended modestly higher in a rather subdued trade on Thursday. Though there were some good earnings supporting the markets but traders seemed reluctant to make significant moves as they continued to digest the minutes of the Federal Reserve's latest meeting, which suggested that officials were divided about the outlook for monetary policy. On the US economic front, the Labor Department released a report, showing a modest decrease in initial jobless claims in the week ended August 13th. The report said initial jobless claims edged down to 262,000, a decrease of 4,000 from the previous week's unrevised level of 266,000. A separate report from the Philadelphia Federal Reserve showed tenuous growth in regional manufacturing activity in the month of August. The Dow Jones Industrial Average was up by 23.76 points or 0.13 percent to 18,597.70, S&P 500 ended up by 4.80 points or 0.22 percent to 2,187.02, while the Nasdaq added 11.49 points or 0.22 percent to 5,240.15. 

 

Crude oil futures extending their upmove surged on Thursday, with Brent crude moving over $50 a barrel after early July, on prospects that major producers could reach a deal to stabilize worldwide energy markets at a closely-watched meeting next month. OPEC head Chakib Khelil made some affirmative comment on the possibility of a production freeze by participants at an energy forum in Algeria in late-September. Benchmark crude oil futures for September delivery surged by $1.38 or 2.88 percent to close at $48.17 a barrel after trading in a range of $46.63 and $48.38 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for October delivery was up by $0.95 or 1.91 percent to $50.80 a barrel on the ICE.

 

Indian rupee ended lower on Thursday due to sustained demand for dollar from banks and importers. Investors remained cautious with the private report indicating that headline inflation is expected to continue its rally through the rest of this fiscal, while WPI is likely to average 3.9 per cent, CPI will average close to 5 per cent in 2016-17. However, strong gains in the equity market restricted the rupee losses. On the global front, the dollar eked out some gains against the yen, with traders cautious about pushing the Japanese currency much higher amid expectations that the Bank of Japan could intervene. Finally the rupee ended at 66.81, stronger by 5 paise from its previous close of 66.76 on Tuesday

 

The FIIs as per Thursday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 11312.47 crore against gross selling of Rs 10531.19 crore, while in the debt segment, the gross purchase was of Rs 771.69 crore with gross sales of Rs 998.71 crore.

 

The US markets managed to extend the gains in last session albeit modestly, reacting to some positive earnings, though the mood was dampened by slight increase in jobless claims. The Asian markets have made mostly a positive start and the Japanese stocks advanced over half a percent in early deals as the yen retreated and crude oil continued its upmove after entering into a bull market. The Indian markets surged in last session, snapping their two days losing streak, supported by upbeat banking stocks. Today the start is likely to be in green and the markets will be extending the gains on supportive global cues. Also, as Moody's Investors Service has retained India's growth forecast at 7.5 per cent for 2016 and revised upwards estimates for China to 6.6 per cent citing strong fiscal and monetary support. Apart from equity markets there will be buzz in the bond markets, as an expert panel with an aim to develop corporate bond market in India, has suggested easing of norms for foreign investors, a corporate bond index on lines of Sensex or Nifty, and making it mandatory for large corporates to tap this market for funds beyond a threshold. There will be action in steel stocks, India has slapped anti-dumping duty on certain cold-rolled flat steel products from four nations including China and South Korea to guard domestic industry from cheap imports. Realty stocks too will be in upbeat mood, as a report on residential market has said that the affordable housing market doubled in new launches in the first half of 2016 as against the same time last year.SBI and its associates too will be in action as the board of State Bank of India (SBI) has approved the swap ratio for taking over four banks -- three of its associate banks as well as Mahila Bank. The merger will create a banking behemoth with an asset book of Rs 37 lakh crore.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index	Previous close	Support	Resistance
NSE Nifty	8673.25	8648.63	8694.28
BSE Sensex	28123.44	28062.24	28199.41

 

Nifty Top volumes

Stock	Volume (in Lacs)	Previous close (Rs)	Support  (Rs)	Resistance (Rs)
ICICI Bank	188.41	252.90	249.17	255.22
State Bank of India	143.15	248.40	246.50	250.35
Axis Bank	120.89	593.15	590.20	596.70
Power Grid	116.24	182.00	177.77	184.72
Adani Ports	94.39	275.45	269.93	278.98

 

• Tata Motors has hiked the price of its recently launched hatchback Tiago in the range of Rs 5,000 to Rs 6,000 as the introductory pricing period ended this month.
• Axis Bank has launched its Contactless Secure+ Debit Card for regular savings account customers, to provide access to a larger customer base with contactless technology.
• Reliance Brands, a part of Reliance Industries, has entered into a long-term master franchise agreement with Amsterdam-based fashion brand Scotch & Soda.
• Mahindra and Mahindra's South Korean subsidiary SsangYong Motor, has decided to recall the Rexton SUV in India. 
• Tata Consultancy Services and JetBlue, one of the leading airlines in the US, are ramping up their relationship to strategically optimize and transform key business channels and enhance digital customer touch points.