Daily Newsletter
NSE Intra-day chart (23 January 2017)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 24 January 2017
Markets to make a green but cautious start

 

In a volatile trading session, Indian benchmark indices managed a green close on Monday as investors' sentiments remained buoyed by rupee appreciation, coupled with hopes of positive incentives in the upcoming Union Budget and broadly positive Asian indices. Some support also came with the BRICS nation's National Development Bank chief K V Kamath's statement that India will continue to grow on the back of its consumption-driven economy. He also said that the demonetisation move in India would have only a short-term blip after which India should be back on a clear growth path. Furthermore, in a written response to the Parliament's Public Accounts Committee (PAC), the Revenue Department said that due to the withdrawal of old high-value notes, the idle or hidden cash has come into the formal system which will be utilised for productive purposes. Regarding other implications, it said that increasing use of non-cash modes of transactions will promote transparency and have a lasting positive impact on tax collections, both direct and indirect.  However, the upside remained capped by the report that foreign investors have pulled out over Rs 5,100 crore from the Indian capital market so far this month over concerns regarding 'lower prospects' of economic growth as compared to other emerging markets. The latest FPI outflow followed withdrawal of close to Rs 77,000 crore on net basis from equity and debts together in last three months (October-December). Meanwhile, describing the official data on the index of industrial production (IIP) for November 2016, during which demonetisation was announced, as a ‘false positive', Crisil Research has said that the latest IIP figures do not reflect the true condition of the Indian manufacturing sector. Belying popular expectations, India's factory output, as measured by the IIP released earlier this month, has rose 5.7% in November, the first month of the government's demonetisation drive. On the global front,  Asian markets ended mostly higher on Monday, though the Japanese shares declined as exporters fell on a stronger yen and after Donald Trump took office as the US president and promised 'American first' policies, adding to concerns about the threat of protectionism. Back home, finally, the BSE Sensex gained 82.84 points or 0.31% to 27117.34, while the CNX Nifty was up by 42.15 points or 0.50% to 8,391.50. 

 

The US markets closed lower on Monday, but off session lows, as investors wrestled with uncertainty over the policies of President Donald Trump and as a batch of corporate quarterly results came out mixed. Stocks initially pared losses as the first official Trump administration news briefing, hosted by Press Secretary Sean Spicer, got under way Monday, following a weekend of protests across the country and world in the wake of Trump's inauguration. That modest paring of losses stalled but picked up again heading into the close. Some fear the postelection rally for stocks may continue to unwind if Trump doesn't start to get more specific about his fiscal plans. Fulfilling a campaign promise, Trump signed an order officially pulling the US out of the Trans-Pacific Partnership. Congress had never ratified the agreement. The Dow Jones Industrial Average lost 27.40 points or 0.14 percent to 19,799.85, the Nasdaq dropped 2.39 points or 0.04 percent to 5,552.94, while S&P 500 was down by 6.11 points or 0.27 percent to 2,265.20.

 

Crude oil futures were unable to hold their last session gains and ended lower on Monday, amid speculation that US production will surge in 2017. US energy companies last week added the most oil rigs in nearly four years. U.S. oil production has risen by more than 6 percent since mid-2016, though it remains 7 percent below the 2015 peak, and is back to levels of late 2014 when oil started a sharp drop from above $100 a barrel. Benchmark crude oil futures for February delivery declined by $1.65 or 0.88 percent to $52.75 on the New York Mercantile Exchange. In London, Brent crude for March delivery ended lower by 0.44 percent at $55.23 on the ICE.

 

Extending losses for the fourth straight session, Indian rupee ended marginally lower against dollar on Monday due to dollar demand from banks and importers. Rupee was strong in the early deals but lost its momentum in the end. Sentiments remained dampened with the report that foreign investors have pulled out over Rs 5,100 crore from the Indian capital market so far this month over concerns regarding 'lower prospects' of economic growth as compared to other emerging markets. The latest FPI outflow followed withdrawal of close to Rs 77,000 crore on net basis from equity and debts together in last three months (October-December). Meanwhile, describing the official data on the index of industrial production (IIP) for November 2016, during which demonetisation was announced, as a ‘false positive', Crisil Research has said that the latest IIP figures do not reflect the true condition of the Indian manufacturing sector. Belying popular expectations, India's factory output, as measured by the IIP released earlier this month, has rose 5.7% in November, the first month of the government's demonetisation drive. On the global front, dollar weakened against a wide range of currencies on Monday amid disappointment that U.S. President Donald Trump's inauguration speech proved light on detail over his plans for economic stimulus. Finally, the rupee ended at 68.21, 3 paise weaker from its previous close of 68.18 on Friday.

 

The FIIs as per Monday'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 4542.43 crore against gross selling of Rs 4509.14 crore, while in the debt segment, the gross purchase was of Rs 565.76 crore with gross sales of Rs 1238.71 crore.

 

The US markets made a modestly lower closing in last session, amid renewed concerns about protectionist policies under new President Donald Trump. The Asian markets have once again made a mixed start with some of the indices trading marginally in red after President Donald Trump targeted reworking America's trade relationships. The Indian markets despite losing some momentum in the mid of the trade managed a positive close in last session. Today, the penultimate session of the F&O series expiry is likely to be in green but cautiousness may prevail lacking any major supportive cues. There will be some concern with US President Donald Trump formally withdrewing from the Trans-Pacific Partnership trade deal, distancing the US from its Asian allies as China's influence rises in the region. On the domestic front, there is buzz that the government is likely to set fiscal deficit target in the range of 3.3-3.4 percent of GDP for the financial year 2017-18 in the upcoming Budget or will target a fiscal deficit of 3.5 per cent of GDP -- same as that of 2016-17. Meanwhile, the Supreme Court paved the way for presentation of the Union Budget on February 1 as it dismissed a plea seeking its postponement in view of Assembly elections in five states. There will be some support to the markets from SBI's research report Ecowrap, which has said that the Government is likely to make sweeping recast of direct taxes in the ensuing Budget to give a boost to the economy following demonetization. The realty stocks may come under pressure on a report from global rating agency Fitch that residential property sales in India are expected to witness at least 20-30 percent dip in 2017 due to demonetisation impact. There will be lots of important earnings announcements to keep the markets buzzing.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

8391.50

8344.42

8421.37

BSE Sensex

27117.34

26998.02

27202.23

 

Nifty Top volumes

 

Stock

Volume

(in Lacs)

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

ICICI Bank

398.12

257.55

254.53

261.18

Hindalco

182.23

181.70

175.17

185.32

Axis Bank

165.03

445.00

441.08

448.93

IDEA

161.83

73.35

71.28

74.53

ITC

106.90

259.65

256.42

261.52

 

  • State Bank of India has raised Rs 5681 crore by issuing preferential shares to the government of India.
  • Lupin has received final approval for its Paroxetin Extended Release Tablets USP, 12.5 mg, 25 mg and 37.5 mg from the United States Food and Drug Administration.
  • Infosys has invested a little over $62 million from its $500 million innovation fund in start-ups.
  • UltraTech Cement has received an approval for setting up of a 3.5 million tonnes per annum integrated cement plant at Dhar in state of Madhya Pradesh.
  • Asian Paints has reported 1.51% rise in its Consolidated net profit after tax, minority interest and share of profit of associates at Rs 489.31 crore for the quarter ended December 31, 2016 as compared to Rs 482.02 crore for the same quarter in the previous year.
News Analysis