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NSE Intra-day chart (05 February 2016)
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Market Commentary 08 February 2016
Markets to get a cautious start of the new week

Indian benchmark equity indices staged a blockbuster performance on the last day of the week by vehemently rallying over a percent in the session and re-conquering their psychological levels. Thursday's optimism got spilled over into the Friday's session helping the frontline indices in extending the winning momentum for second successive session, as encouraging global developments buttressed domestic sentiments. Investors continued to build hefty positions across the board as sentiments got a boost with reports that foreign direct investment (FDI) in the country doubled to about $ 4.5 billion in December 2015. Some support also came with the report that India is expected to grow by 7.6 per cent in the October-December quarter of the current fiscal -- the fastest pace of expansion in five quarters. According to the report, domestic demand witnessed during the festival season is expected to support growth in the third quarter, even as global headwinds have had an adverse impact on manufacturing and exports. Furthermore, Chief Economic Advisor Arvind Subramanian gave one more candle to investors by saying slump in oil, steel and cement prices presents India with an opportunity to build infrastructure at lower costs as well as shore up public and private spending. However, there was some cautiousness too with a survey conducted by the Reserve Bank of India stating that Indian households expect inflation at over 10 percent in the year ahead, twice as much as RBI's retail inflation target of 5 percent by March 2017. On the global front, Asian markets ended mostly higher on Friday, while European markets were little changed in early trade. Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from global markets. The frontline indices slowly but steadily started gathering steam and surged by over half a percent by late morning trades. Thereafter, the indices kept oscillating in a narrow range through the day's trade. Finally, the BSE Sensex surged 278.54 points or 1.14% to 24616.97, while the CNX Nifty ended up by 85.10 points or 1.15% to 7,489.10.


The US markets slipped on Friday, as a rout in tech stocks helped US equities post their largest weekly drop in a month. Adding to negative sentiment was a jobs report that showed weaker-than-forecast growth in January. The pace of hiring in the US tapered off in January, but wages rose sharply and the unemployment rate dipped below 5% for the first time since 2008 in a mixed report that adds little clarity about the health of the economy. The US generated 151,000 nonfarm jobs in the first month of 2016. Meanwhile, the nation's trade deficit rose 2.7% in December as exports fell again, capping the first year since 2009 in which US exports have declined. The US trade gap increased to a seasonally adjusted $43.4 billion from $42.2 billion in November. US exports dipped 0.3% to $181.5 billion. They fell 4.8% in 2015 to mark the largest decline since the final year of the Great Recession. The Dow Jones Industrial Average lost 211.61 points or 1.29 percent to 16,204.97, the Nasdaq was down 146.42 points or 3.25 percent to 4,363.14 while the S&P 500 dropped 35.40 points or 1.85 percent to 1,880.05.  


Crude oil futures declined on Friday amid strength in dollar and a late sell-off pushed domestic oil prices back toward $30 a barrel. With the decline for the day, crude extended the weekly losses amid dwindling hopes for an OPEC production cut. Members of the cartel are hesitant to trim output as they fear losing market share, keeping crude oil prices near 12-year lows. Prices were also weighed down by disappointing jobs report. Benchmark crude oil futures for March delivery declined by $0.84 or 2.66 percent to $30.88 a barrel after trading in a range $30.80 and $32.42 a barrel on the New York Mercantile Exchange. In London, Brent crude for April delivery closed at $34.02, down $0.44 or 1.28 percent on the ICE.


Indian rupee ended weaker against dollar on Friday on bouts of continued dollar demand from importers and banks. Besides, cautiousness ahead of key economic data from the US due later in the day and domestic growth data due on 8 February also pressurized the domestic unit. There was some cautiousness with a survey conducted by the Reserve Bank of India stating that Indian households expect inflation at over 10 percent in the year ahead, twice as much as RBI's retail inflation target of 5 percent by March 2017. Investors failed to get comfort with India Ratings' report that the Indian economy may have expanded by 7.6% in the third quarter that ended in December 2015. However, gains in domestic equity market capped some rupee losses. On the global front, Yen edged higher versus many currency rivals, such as the US Dollar, as many traders predict positive Japanese growth in response to negative rates. Finally, the rupee ended at 67.65, 9 paise weaker from its previous close of 67.56 on Thursday.


The FIIs as per Friday's data were net sellers in equity segment, while they were net buyers in debt segments. In equity segment, the gross buying was of Rs 3123.44 crore against gross selling of Rs 3301.02 crore, while in the debt segment, the gross purchase was of Rs 599.17 crore with gross sales of Rs 180.05 crore.     


The US markets ended lower in last session following the release of a Labor Department showing disappointing job growth in January but also a drop in the unemployment rate to a nearly eight-year low. Some of the trading Asian markets have made a cautious start and the Japanese market was trading marginally in red though the country posted an 18th consecutive current account surplus as cheap energy imports continue to aid an economy that's struggling to produce sustained growth and inflation. The Indian markets extended their rally in last session, with major averages surging by over a percent. Today, the start of the new week is likely to be cautious as the global markets are not very optimistic after the disappointing US jobs data. However, all eyes will be on GDP Data slated to be announced later in the day and general expectations are that India will remain one of the fastest growing economies in the world, with GDP annual growth at 7.3 per cent in the quarter through December. Traders may get some support with IMF chief Christine Lagarde stating that she hoped Indian Government would be able to implement a series of 'critically important' economic reforms including GST for unleashing the country's growth potential. Meanwhile, Finance Minister Arun Jaitley has said that the Centre and states need to work together to put the country on a high growth path even as states pitched for higher allocation to meet additional outgo towards pay revision of their employees. There will be buzz in the infra stocks, as the government has cleared highways projects for 9 states worth about Rs 17,000 crore to be awarded before March. Steel stocks too will remain in action, after the government set a minimum import price for steel products to check dumping from countries such as China and South Korea.



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Tata Steel






  • Lupin has reported 49.31% rise in its net profit at Rs 766.42 crore for the quarter ended December 31, 2015 as compared to Rs 513.30 crore for the same quarter in the previous year.
  • Coal India is planning to acquire coal mines in South Africa in partnership with local government amid falling prices of assets globally as it gears up to meet the 1bn output target.
  • M&M has showcased it's all new concept coupe XUV Aero and its Korean arm SsangYong's compact SUV Tivoli during the ongoing 14th Auto Expo Motor Show 2016 in New Delhi.
  • Bosch has posted a 99 percent increase in net profit to Rs. 221 crore during the third quarter of the fiscal on the back of higher sales and benefit from organisational restructuring.
  • Tata Steel is focusing on measures to bring down cost, increase sale of value-added products and improve exports to realign the company with new market realities.
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