Indian equity bourses resumed
their gaining rally on Wednesday, with Sensex and Nifty ending higher by over a
percent each. After a fabulous opening, markets remained positive for the whole
day, as the Finance Minister Nirmala Sitharaman said that the government would
announce measures to tackle the financial fallout from the coronavirus outbreak
amid a fall in new cases in China. Traders took some support with the Reserve
Bank of India (RBI) Governor Shaktikanta Das' statement that there is no reason
to doubt that the government will be able to cut fiscal deficit to 3.5% of the
GDP in the fiscal beginning April 1. In the second half of the trading session,
key benchmarks extended their gains to settle near their day's high points,
aided with the Minister of State for Finance Anurag Singh Thakur's statement
that the government expects to resolve 90 per cent of the income tax disputes
through 'Vivaad se Vishwas' scheme announced in the Budget for 2020-21. Market
participants paid no heed towards a private report stating that the sharp
reduction in lending rates is insufficient to prop up credit growth which is
set to fall in July this year. Deterioration in factory output and real wage
growth are the impeding factors limiting the growth in credit. Finally, the BSE
Sensex gained 428.62 points or 1.05% to 41,323.00, while the CNX Nifty was up
by 133.40 points or 1.11% to 12,125.90.
The US markets ended higher on
Wednesday, with the S&P 500 and Nasdaq finishing at all-time highs, as
investors were encouraged by comments from the Federal Reserve and measures
China says it has taken to help coronavirus-stricken businesses. Minutes from the
rate-setting Federal Open Market Committee's January meeting showed that Fed
officials believe the US economy appeared stronger in late January than they
had been expecting. However, Fed members at the meeting, where they kept rates
at a 1.50%-1.75% range, expressed concerns about the threat of the coronavirus
outbreak in China, and of tensions in the Middle East, which may suggest that
the central bank may be more inclined to ease rates than to raise them in the
near-term. Policy makers emphasized their intention to provide some stability
for markets and the economy for a time after cutting rates three times in
succession last year. On the economic data front, a report released by the
Commerce Department showed a pullback in new residential construction in the US
in the month of January. The Commerce Department said housing starts slumped by
3.6 percent to an annual rate of 1.567 million in January after soaring by 17.7
percent to a revised rate of 1.626 million in December. Meanwhile, producer
prices in the US increased by much more than anticipated in the month of
January, according to a report released by the Labor Department. The Labor
Department said it producer price index for final demand climbed by 0.5 percent
in January after rising by 0.2 percent in December.
Crude oil futures settled higher
with gains of over two percent on Wednesday as concerns about the outlook for
energy demand eased after reports said the number of coronavirus cases fell
down for a second straight day in China. According to the National Health Commission,
mainland China had 1,749 new confirmed cases of coronavirus infections on
February 18, down from 1,886 cases a day earlier and the lowest since January
29. Besides, Expectations that the
Organization of the Petroleum Exporting Countries (OPEC) and allied producers
will deepen output cuts, and the US decision to cut more Venezuelan crude from
the market contributed as well to the rise in crude oil prices. Crude oil
futures for March surged $1.24 or 2.4 percent to settle at $53.29 a barrel on
the New York Mercantile Exchange. April Brent crude rose $1.37 or 2.4 percent
to settle at $59.12 a barrel on London's Intercontinental Exchange.
Indian
Money market remained closed on Wednesday on account of Chhatrapati Shivaji
Maharaj Jayanti.
The FIIs as per Tuesday'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 4177.32 crore against gross
selling of Rs 4004.00 crore, while in the debt segment, the gross purchase was
of Rs 1424.43 crore with gross sales of Rs 1542.84 crore. Besides, in the
hybrid segment, the gross buying was of Rs 16.12 crore against gross selling of
Rs 13.80 crore.
The US markets ended higher on
Wednesday on signs of slowing coronavirus infections and expectations that
China would take more measures to bolster its virus-hit economy. Asian markets
are trading mostly in red in early deals on Thursday. Indian markets snapped
four-day losing streak and ended higher on Wednesday after the Finance Minister
Nirmala Sitharaman said that the government would announce measures to tackle
the financial fallout from the coronavirus outbreak. Today, the start of
session is likely to be weak amid lackluster trade in Asian peers and rise in
crude oil prices overnight. There will be some cautiousness with the Reserve
Bank of India (RBI) Governor Shaktikanta Das' statement that the coronavirus
outbreak will have a limited impact on India but the global GDP and trade will
definitely get affected due to the large size of the Chinese economy. He added
that only a couple of sectors in India are likely to see some disruptions but
alternatives are being explored to overcome those issues. Traders also will be
concerned with Fitch Ratings' report that with deceleration in growth and tight
liquidity conditions, the country's financial institution sector may continue
to face challenging operating environment. It said the stress in non-banking
financial companies, small and medium enterprises (SMEs) and the real estate
sector will continue to put asset-quality pressures on financial institutions
in the country. Though, some support may come later in the day as the
government approved setting up of 10,000 new farmer produce organisations
(FPOs) by 2024 with budgetary support of nearly Rs 4,500 crore as part of its
efforts to cut production cost and boost income of farming community. Auto
stocks will be in focus with ICRA's report that India's automobile industry is
likely to be negatively impacted and supply chain disrupted if the Coronavirus
(COVID-19) outbreak in China and South-East Asia persisted longer. There will
be some reaction in dairy stocks as the government increased the interest
subvention or subsidy on loans given to the dairy sector from 2 per cent to 2.5
percent.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
12,125.90
|
12,067.10
|
12,159.70
|
BSE Sensex
|
41,323.00
|
41,128.90
|
41,437.13
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,277.01
|
35.30
|
33.87
|
36.47
|
Tata Motors
|
789.14
|
158.05
|
152.53
|
164.08
|
SBI
|
398.47
|
320.35
|
317.07
|
323.82
|
Bharti Infratel
|
225.82
|
225.10
|
215.50
|
231.45
|
ONGC
|
218.06
|
101.70
|
99.60
|
103.00
|
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