It turned out to be a
lackadaisical performance from the Indian benchmark indices on Wednesday as
they snapped the session near neutral line. Sentiments remained dismal after
Reserve Bank of India (RBI) maintained status quo on interest rates in its
sixth monetary policy review of financial year 2016-17. The central bank
decided to change the stance from accommodative to neutral and kept the
short-term lending rate, called repo rate, unchanged at 6.25%, opting to wait
for more clarity on the trend for inflation. RBI has also cut the economic
growth forecast to 6.9 percent for the current fiscal from 7.1 percent
estimated earlier. However, inventors got some comfort with the central bank's
statement that demonetisation-induced ease in bank funding conditions has led
to a sharp improvement in transmission of past policy rate reductions into
marginal cost-based lending rates (MCLRs), and in turn, to lending rates for
healthy borrowers, which should spur a pick-up in both consumption and
investment demand. It also said the economic activity in cash-intensive sectors
such as retail trade, hotels and restaurants, and transportation, as well as in
the unorganised sector, is expected to be rapidly restored. Some support also
came after Economic Affairs Secretary Shaktikanta Das rejecting arguments that
fiscal deficit target of 3.2 per cent is optimistic, said it is realistic and
there is all possibility that revenues will exceed the target as Budget has not
taken into account the demonetisation windfall. Besides, he said, there would
be collection taxes next fiscal from those who fail to avail Pradhan Mantri
Garib Kalyan Yojana (PMGKY). On the global front, Asian markets ended mostly
lower on Wednesday on lingering political and economic uncertainty in the
United States and Europe, which sapped investors' confidence. Back home,
finally, the BSE Sensex declined 45.24 points or 0.16% to 28289.92, while the
CNX Nifty was up by 0.75 points or 0.01% to 8,769.05.
The US markets closed mostly
higher on Wednesday, but weak financial stocks dragged the Dow Jones Industrial
Average lower in a session where the major indexes mostly hugged the flat line.
Financial stocks were pressured by falling yields, with the benchmark 10-year
Treasury note's yield earlier touched three-week low. Low yields tend to hurt
banks' business models. Major US stock indexes are hovering around record highs
after a rally following the November 8 election of President Donald Trump amid
expectations he will usher in fiscal stimulus and lower regulations and taxes.
But the rally has stagnated in recent days as investors await more details
about Trump's potential economic policy agenda. Federal Reserve Chair Janet
Yellen will testify on the US economy and monetary policy before the House
Financial Services Committee on February 15. The Nasdaq was up 8.23 points or
0.15 percent to 5,682.45, S&P 500 gained 1.59 points or 0.07 percent to
2,294.67, while the Dow Jones Industrial Average lost 35.95 points or 0.18
percent to 20,054.34.
Crude oil futures ended modestly
higher despite data on crude oil inventories from the the Energy Information
Administration (EIA) showed a massive build and the third straight weekly
increase. EIA reported that crude oil inventories in the U.S. jumped by 13.5
million barrels at the end of last week. However, gasoline stockpiles
unexpectedly fell, signaling that demand for crude oil will rise in the coming
weeks. Gasoline stocks fell 869,000 barrels and crude stocks at the Cushing,
Oklahoma, delivery hub for US crude futures rose 1.1 million barrels. Benchmark
crude oil futures for March delivery gained $0.17 or 0.33 percent to $52.34 on
the New York Mercantile Exchange. In London, Brent crude for March delivery
ended higher by $0.07 or 0.13 percent at $55.12 on the ICE.
Indian
rupee ended stronger against dollar on Wednesday on account of sustained
selling of American currency by banks and importers. Local currency got some
support from a private report stating that the global economic order is
expected to shift from advanced to emerging economies over the next few decades
and by 2040 India could edge past the US to become the world's second largest
economy in purchasing power parity (PPP) terms. Rupee strengthened further
despite the Monetary Policy Committee of the Reserve Bank of India, headed by
Urjit Patel, unanimously decided to hold the key repo rate at 6.25 percent and
reverse repo rate at 5.75 percent. On the global front, euro slipped against
dollar, pressured by political woes in Europe ahead of elections that checked
its recent ascent against the dollar. Finally, the rupee ended at 67.18, 24
paise stronger from its previous close of 67.42 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 4393.68 crore against gross selling of Rs 4123.38 crore, while
in the debt segment, the gross purchase was of Rs 2010.85 crore with gross
sales of Rs 1302.64 crore.
The US markets made a mixed
closing in last session after showing a lackluster trade through the day, as
traders seemed reluctant to make significant amid another relatively quiet day
on the U.S. economic front, though the tech-heavy Nasdaq reached a new record
closing high. The Asian markets have made a mixed start with some indices
trading marginally in red with the Euro-dollar volatility surged as investors
assess political risks in Europe and the US, while the Chinese market extended
the rally. The Indian markets coming off the intraday low managed a flat
closing in last session, with traders digesting RBI's status quo stance. Today,
the start is likely to remain cautious with RBI cutting the economic growth
forecast to 6.9 percent for the current fiscal from 7.1 percent estimated
earlier, even as the RBI governor said the economy will bounce back to 7.4
percent rate next fiscal. Markets may get some support with governor's another
statement that there is further scope for banks to reduce lending rates as the
Reserve Bank has already brought down its policy rates by 175 basis points
since January 2015. Marketmen will also be getting some support with reports
that foreign direct investment into the country surged by 60 percent to $ 4.68
billion in November 2016, compared to $2.93 billion in November 2015. There
will be some buzz in the IT stocks, as global IT major Cognizant has guided for
a revenue growth of $3.51 billion to $3.55 billion for March quarter. The
company expects March quarter non-GAAP diluted EPS to be at least $0.83 per
share. There will be lots of earnings reactions to keep the markets buzzing.
Support and Resistance: NSE (Nifty)
and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8769.05
|
8725.62
|
8801.87
|
BSE Sensex
|
28289.92
|
28162.12
|
28404.68
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
IDEA
|
301.58
|
109.55
|
107.43
|
111.33
|
BHEL
|
251.36
|
156.25
|
151.78
|
158.93
|
ICICI Bank
|
151.47
|
285.80
|
282.83
|
288.63
|
SBI
|
136.21
|
277.20
|
273.45
|
280.10
|
Tata Steel
|
112.86
|
470.65
|
463.60
|
481.55
|
ICICI Bank's subsidiary ICICI Securities has entered into a strategic partnership with Saxo Bank.
Tata Power has launched 'spot collection' facility in the eastern part of Mumbai to provide value-added services to its consumers.
Idea Cellular is planning to raise Rs 1,000 crore through issuance of non-convertible debentures on private placement basis.
NTPC has reported 7.50% fall in its net profit at Rs 2468.72 crore for the quarter ended December 31, 2016 as compared to Rs 2668.77 crore for the same quarter in the previous year.
Bharti Airtel is restructuring its shareholding pattern of foreign subsidiaries to simplify the structure and bring in synergies between the companies.