Snapping two days losing streak,
Indian equity benchmarks staged an enthusiastic performance on Wednesday, by
rallying over half a percent and breaking the important psychological levels in
their northward journey as a much stronger-than-expected quarterly economic
growth lifted sentiments. India's Gross domestic product (GDP) for the third
quarter (Q3) of financial year 2016-17 (FY17) grew at 7%, allaying fears of any
major effect of demonetisation though it was the lowest expansion in four
quarters. The Q3 numbers not only made India the fastest-growing large economy
in the world but also helped the Central Statistics Office (CSO) retain its
earlier projection (in first advance estimates) for full-year GDP growth at
7.1% in the second advance estimates released on Tuesday. The market sentiments
were also underpinned by a private survey indicating that Indian manufacturing
sector expanded marginally in February as a rebound in export demand
contributed to a stronger expansion of total new orders. The Nikkei Markit
India Manufacturing Purchasing Managers' Index (PMI) -- an indicator of
manufacturing activity -- increased to 50.7 in February, up from 50.4 in
January, as output and order books rose at accelerated rates. However, in the
early deals there was some cautiousness as CSO has actually forecast a greater
slide in gross value added (GVA), suggesting that deceleration is sharper than
what the headline GDP growth numbers suggest. The CSO data shows that growth in
GVA, which is GDP minus net taxes, will slow down to 6.7% in 2016-17 or 1.1%
lower than 7.8% GVA growth in 2015-16. GVA serves as a more realistic proxy to
measure changes in the aggregate value of goods and services produced in the
economy. The demonetisation effect and the resultant slowdown in household
spending and corporate investment may well be hiding in the steeper fall in GVA
growth estimates compared to GDP.
Furthermore, the growth of eight core sectors has decelerated to 3.4% in
January compared to 5.7% in the same month last year, thanks to plummeting
output in three key segments - cement, fertilisers and refinery products. Meanwhile, information technology (IT) stocks
surged after the US President Donald Trump's first speech to US congress was
seen more restrained than the harsh rhetoric seen during his pre-election
speeches. The speech did not have any comment on visa issues that may hit
domestic IT firms. Instead, the US President said the US immigration should be
based on a merit-based system, rather than relying on lower-skilled immigrants.
Finally, the BSE Sensex surged 241.17 points or 0.84% to 28984.49, while the
CNX Nifty was up by 66.20 points or 0.75% to 8,945.80.
The US markets closed higher on
Wednesday, as investors welcomed President Donald Trump's conciliatory tone
during his address to a joint session of Congress, despite a lack of details on
his economic plans. Trump delivered his address to Congress after the market's
close Tuesday. In what many saw as a rather reserved speech, the US president
said he would push for around $1 trillion in infrastructure spending, and
promised ‘massive tax relief' for the middle class and tax cuts for
corporations. Otherwise, the speech was lacking in firm details about his
economic plans. Stocks even rose slightly higher following the release of the
Fed's Beige Book, which pointed out that business optimism has cooled a bit
since the election. It said businesses were generally optimistic about the near
term but to a somewhat lesser degree than in the prior report. On the economy
front, a report on personal income and outlays showed that the cost of goods
and services outpaced household income, with the year-over-year inflation
rising to the highest level since 2012. The Dow Jones Industrial Average added
303.31 points or 1.46 percent to 21,115.55, Nasdaq was up 78.59 points or 1.35
percent to 5,904.03, while S&P 500 gained 32.32 points or 1.37 percent to
2,395.96.
Crude oil futures declined on
Wednesday reacting to the inventory data, as stockpiles surging for the eighth
straight week swelled to a record high. The U.S. Energy Information
Administration (EIA) said that crude oil inventories rose by 1.5 million for
the week ending February 24, less than forecast but touched a record high of
520.2 million. Gasoline inventories decreased by 546.00 barrels, while
distillate stockpiles fell by 0.925 million barrels. Benchmark crude oil
futures for April delivery declined by $0.18 or 0.3 percent to $53.83 on the
New York Mercantile Exchange. In London, Brent crude for May delivery ended lower
by $0.13 at $56.38 on the ICE.
Indian
rupee ended weaker against dollar on Wednesday on account of sustained demand
for dollar from banks and importers. Sentiments remained dampened with a report
that India's fiscal deficit touched Rs 5.64 lakh crore at the end of January,
105.7 percent of the full-year target, mainly due to lower realisation of
non-tax revenue. In the Budget presented on February 1, the government had
retained the fiscal deficit target at 3.5 per cent of GDP. The rupee sentiments
were also hit as the growth of eight core sectors decelerated to 3.4% in
January compared to 5.7% in the same month last year, thanks to plummeting
output in three key segments - cement, fertilisers and refinery products. On
the global front, dollar ticked up on Wednesday as Federal Reserve
policy-setters fanned expectations of a rate hike this month, while US
President Donald Trump offered Congress little details on his stimulus as some
investors had expected. Finally, the rupee ended at 66.82, 13 paise weaker from
its previous close of 66.69 on Tuesday.
The
FIIs as per Wednesday's data were net buyers in equity and debt segments both. In
equity segment, the gross buying was of Rs 9316.63 crore against gross selling
of Rs 8282.56 crore, while in the debt segment, the gross purchase was of Rs
1032.85 crore with gross sales of Rs 829.21 crore.
The US markets rallied in last
session with all the major averages climbing to new record closing highs, in a positive
reaction to President Donald Trump's address to a joint session of Congress.
Traders were also reacting to indications of a jump in the chance of an
interest rate hike by the Federal Reserve later this month. The Asian markets
have made a positive start tailing the overnight cues from the Wall Street.
Japan's Topix jumped 1.1 percent, to the highest since Dec. 18, 2015 as the yen
weakened against the dollar. The Indian markets went for a rally in last
session reacting to the surprisingly good GDP numbers for the third quarter.
Today, the start is likely to remain in green on supportive global cues.
Traders will be getting some support with a hedge fund investor survey that
investors are likely to remain focused on exposure to emerging markets in 2017,
particularly on Asia-Pacific and India. Meanwhile, Finance Minister Arun
Jaitley has said that the Q3 GDP data was substantially impacted by
demonetization, adding that Indian economic growth is likely to pick up further
in coming quarters and that GDP number belies exaggerated claim by many that
rural sector was in distress. In other positive cues for the market Moody's
Investors Service has said that demonetisation will be credit positive for
India as it is likely to reduce tax avoidance and corruption. The agency however
projected growth to slow to 6.4 percent in the January-March quarter, from 7
percent in the previous three months. The PSU oil marketing companies will be
in action, as the price of non-subsidised LPG was raised by Rs 86 per cylinder,
the steepest such hike ever in India, in line with the rise in global LPG
product prices. The cost of aviation turbine fuel, too, has been raised by Rs
214 per kilolitre to Rs 54,293.38 per kilolitre.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8945.80
|
8909.33
|
8971.53
|
BSE Sensex
|
28984.49
|
28862.72
|
29067.72
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
Hindalco
|
190.44
|
189.25
|
185.23
|
192.63
|
ICICI Bank
|
181.66
|
279.10
|
277.25
|
280.95
|
IDEA
|
167.00
|
113.25
|
111.53
|
115.43
|
ITC
|
145.78
|
268.50
|
264.03
|
271.33
|
ONGC
|
112.43
|
193.85
|
192.60
|
195.90
|
Wipro has unveiled a new IoT-based solution for wind parks and wind turbine manufacturers that leverages the Hewlett Packard Enterprise Windpark Manager 4.0.
Mahindra Tractors, a farm equipment sector of Mahindra & Mahindra, has recorded its tractor sales numbers for February 2017.
Reliance Industries' telecom arm - Reliance Jio Infocomm has collaborated with Samsung to further improve its quality of LTE services in India.
Maruti Suzuki India has reported a jump of 10.9% in total sales at 130,280 units in February 2017.