Indian equity benchmarks snapped
three-day losing streak as investors opted to buy beaten down but fundamentally
strong stocks amid positive global cues. Sentiments got a boost after the
Economic Survey said the government will likely meet its FY16 fiscal deficit
target of 3.9 percent, while at the same time it also indicated that India's
long run potential GDP growth is substantial, about 8 to 10 per cent.
Presenting an optimistic picture of Indian economy, Chief Economic Adviser
Arvind Subramanian's Economic Survey 2015-16 said that amidst the gloomy
landscape of unusual volatility in the international economic environment,
India stands as a haven of stability and an outpost of opportunity. The
Economic Survey also talked about India's exports, which are in the negative
zone since December 2014, and are expected to start picking up from the next
fiscal. On the flipside, the survey enumerated three downside risks - turmoil
in global economy could worsen the outlook of exports, contrary to expectations
oil price rise would increase the drag from consumption and the most serious
risk is the combination of these two factors. The survey also expressed concern
over approval of GST Bill being elusive so far and the disinvestment programme
falling short of targets. Meanwhile, market participants remained cautious on
report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1466
crore on February 25, 2016. On the global front, Asian stocks rose on Friday,
while European stocks too climbed in early trade. Back home, the benchmark
started the day on an optimistic note tracking the Asian peers which traded
mostly in the green following the upbeat overnight cues from the Wall Street,
while recovery in global crude oil prices also aided sentiment. The key indices
remained choppy through the morning trades but saw a sudden spurt in buying in
early afternoon trades post the Economic Survey 2016 tabled in the Parliament,
reinstated confidence in the growth of Indian economy for the next two years. Finally,
the BSE Sensex gained 178.30 points or 0.78% to 23154.30, while the CNX Nifty
added 59.15 points or 0.85% to 7,029.75.
The US markets ended the choppy
day of trade mostly in red on Friday as traders reacted negatively to the
release of a batch of largely upbeat U.S. economic data, which led to renewed
worries about the outlook for interest rates. Shortly after the start of
trading, the Commerce Department released a report showing that personal income
and spending both increased by 0.5 percent in January, exceeding estimates.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said the increase in
spending indicates there is no danger of the economy falling into an imminent
recession. However, the report also said a key reading on core consumer prices
rose by 0.3 percent in January, pushing the annual rate of growth up to 1.7
percent from 1.5 percent. A separate report from the Commerce Department showed
that economic growth slowed by less previously estimated in the fourth quarter
of 2015. The report said real gross domestic product increased by 1.0 percent
in the fourth quarter, reflecting an upward revision from the initially
reported 0.7 percent growth. The University of Michigan also released a report
showing a smaller than initially estimated drop in consumer sentiment in
February. The Dow Jones Industrial Average declined 57.32 points or 0.34
percent to 16,639.97 and the S&P 500 gained 3.63 points or 0.19 percent to
1,948.05. However, Nasdaq was up 8.27
points or 0.18 percent to 4,590.47.
Crude oil futures suffered some
profit taking and declined on Friday, though for the week the US crude rose 11
percent on the week, its steepest weekly rise since August, while the Brent
crude was up by more than 6 percent. Meanwhile prices moved higher in early
trade on news that pipeline outages in Iraq and Nigeria had removed more than
800,000 barrels of crude per day from the global market for at least the next
two weeks. There were positive economic reports from US like an upward revision
to the country's fourth-quarter economic growth that too supported the prices.
However, in latter trade there was profit taking that dragged the prices down. Benchmark
crude oil futures for April delivery ended at $32.78, down $0.29 or 0.88
percent, after trading in a range of $32.67 and $34.66 a barrel on the New York
Mercantile Exchange. In London, Brent crude for April delivery ended at $35.10,
down $0.19 or 0.54 percent on the ICE.
Indian rupee ended stronger
against dollar on Friday on the back of selling of the American currency by
banks and exporters. Besides, dollar's weakness overseas and gains in equity
market also added to the positive milieu of the domestic currency. The rupee
sentiment was upbeat as the Economic Survey has revised upward India's GDP
growth range to 7 to 7.75 per cent for 2015-16 against earlier government
projected growth rate of 7 to 7.5 per cent. The sentiment further got support
after the Economic Survey stated that the government will likely meet its FY16
fiscal deficit target of 3.9%, while at the same time it also indicated that
India's long run potential GDP growth is substantial, about 8 to 10 percent. On
the global front, dollar edged down against the basket of major currency
overseas, as investors remained cautious on a two-day Group of 20 (G20) summit
of finance ministers and central bankers in Shanghai. Finally, the rupee ended
at 68.62, 10 paise stronger from its previous close of 68.72 on Thursday.
The FIIs as per Friday's data
were net sellers in equity and in debt segments both. In equity segment, the
gross buying was of Rs 4965.03 crore against gross selling of Rs 6027.88 crore,
while in the debt segment, the gross purchase was of Rs 509.99 crore with gross
sales of Rs 1555.09 crore.
The US markets made a mixed
closing in last session, after failing to sustain an initial upward move. Traders
reacted to largely upbeat US economic data. While the reports eased concerns
about the possibility of a recession, the data also led to renewed worries
about the outlook for interest rates. The Asian markets have made a mixed
start, with some indices trading in red led by Chinese market, which is down by
over three percent after Group of 20 finance chiefs made only vague commitments
to spur growth after talks in Shanghai. The Japanese market though was in green
despite the yen rebounding from a three-day drop. The Indian markets made a
good bounce back in the last session after the Economic Survey of the
government gave encouraging signals for the economy despite gloomy global
outlook. Today, the big day of the markets is likely to get a cautious start,
with all eyes on the Union Budget for 2016-17. Finance Minister Arun Jaitley while
presenting his third and challenging Budget will have to give equal importance
to the farm sector as well as the industry, amid back-to-back droughts and high
industry expectations. Jaitley will be announcing details of the gradual
reduction of corporate tax from 30 per cent to 25 per cent over four years. The
budget may also look into retrospective taxation and may have some provisions
for the legacy issues. Meanwhile, Chief Economic Adviser Arvind Subramanian has
said that government is open to the idea of going in for higher fiscal deficit
to propel growth in the upcoming Budget and will take a balanced view after
considering various factors. Markets may get some support with the report that foreign
direct investment (FDI) into the country increased by 40 percent to $ 29.44
billion during April-December in the current fiscal. Power sector stocks will
be in action, as the Prime Minister Narendra Modi has asked the Power Ministry
to target electrification of around 200 villages every week by holding regular
follow ups with the state implementing agencies.
Support
and Resistance: NSE Nifty and BSE Sensex
Index
|
Previous close
|
Support
|
Resistance
|
CNX Nifty
|
7029.75
|
6992.27
|
7060.07
|
BSE Sensex
|
23154.30
|
23041.52
|
23247.49
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
SBI
|
300.51
|
155.90
|
152.73
|
158.88
|
ICICI Bank
|
224.43
|
184.80
|
181.72
|
186.92
|
Bank of Baroda
|
153.14
|
132.75
|
128.22
|
135.77
|
Vedanta
|
139.69
|
71.80
|
69.97
|
73.07
|
Hindalco
|
98.06
|
69.45
|
67.12
|
70.87
|
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