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NSE Intra-day chart (07 February 2018)
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Market Commentary 08 February 2018
Markets likely to start mildly in green


Indian equity benchmarks extended southward journey for seventh straight session and settled with a cut of around quarter a percent, as Reserve bank of Indian (RBI) kept repo rate unchanged. Markets started the session on optimistic note amid firm global cues. Traders took some encouragement with report that as many as 67 foreign direct investment proposals (FDI) worth Rs 117 billion were approved during the first nine months of the ongoing financial year. Some support also came with report that Indian firms mobilized Rs 21,000 crore by issuing shares to institutional investors during the December quarter of the current fiscal, resulting into an over 13-fold rise from the year-ago period. The firms had mopped up Rs 1,576 crore in the same period of the previous fiscal. The funds have been mobilized for business expansion, refinancing of debt, working capital requirements and other general corporate purposes. Meanwhile, Finance Secretary Hasmukh Adhia said that the import duty hike in 45 items announced in the Budget will earn about Rs 7,000 crore revenues to the government and is mainly intended to give a push to the MSMEs for domestic manufacturing. However, markets turned choppy after RBI kept the key policy rate unchanged at 6% for the third consecutive time in view of firming inflation. Reverse Repo rate was also maintained at 5.75%. The Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel had last reduced the benchmark lending rate by 0.25 percentage points to 6% last August, bringing it to a 6-year low. Sentiments also remained dampened with RBI cutting its FY18 GVA growth to 6.6%. The policy added that retail inflation, measured by the year-on-year change in the Consumer Price Index (CPI), increased for the sixth consecutive month in December on account of a strong unfavourable base effect. Traders also remained concerned on report that India's fiscal deficit is expected to come in at 3.5% of GDP in financial year 2018-2019, as policymakers seek to promote economic growth by reducing the pace of fiscal consolidation. According to the report by BMI Research, a unit of Fitch Group, there is room for fiscal slippage as the government seeks to achieve its 7.5% growth target. Finally, the BSE Sensex declined 113.23 points or 0.33% to 34,082.71, while the CNX Nifty was down by 21.55 points or 0.21% to 10,476.70.


The US markets closed lower on Wednesday, after failing to defend intraday gains as investors struggled to adjust to an investment environment marked by both rising bond yields and signs of inflation. The market's move south coincided with a spike in the 10-year Treasury yield in the wake of the news of a two-year budget deal announced by top senators that would significantly raise fiscal spending. Congressional leaders reached an agreement on a two-year budget pact that would increase fiscal spending by $300 billion on the back of a big increase in military spending. The deal, which still needs to be approved by the Congress, is at least likely to put to rest fears of another government shutdown. On the economy front, consumer borrowing remained strong in December although slower than the torrid pace seen in the prior month. Total consumer credit increased $18.4 billion in December to a record seasonally adjusted $3.84 trillion, posting an annual growth rate of 5.8%. This was down from a revised $31 billion rate in the prior month. The prior two months were revised higher by $5.5 billion. Revolving credit, like credit cards, rose 6% in December, less than half the 13% pace seen in November. Revolving credit is $1.03 trillion, the highest on record. Non-revolving credit, typically auto and student loans, rose 5.7% in December after an 8.6% rise in the prior month. In the fourth quarter, consumer credit rose at a 7.7% annual rate, the strongest quarter of the year. The Dow Jones Industrial Average slipped 19.42 points or 0.08 percent to 24,893.35, the Nasdaq dropped 63.898 points or 0.90 percent to 7,051.98, the S&P 500 edged lower by 13.48 points or 0.50 percent to 2,681.66.


Extending their recent slump, Crude oil futures declined sharply to one month low on Wednesday after data showed U.S. oil inventories dropped for a second week in a row. The U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.9 million barrels from the previous week. Total motor gasoline inventories increased by 3.4 million barrels last week, and are in the middle of the average range. A stronger dollar and demand concerns also weighed on oil prices. Rising interest rates may cool off the economy, resulting in diminished demand for energy products. Benchmark crude oil futures declined $1.60 or 2.5 percent, at $61.79 a barrel on the New York Mercantile Exchange. Brent crude lost $1.35, or 2 percent, to $65.51 a barrel on London's Intercontinental Exchange.


Indian rupee pared all of its gains and ended marginally weaker against dollar on Wednesday, due to fresh demand for the American currency from banks and importers. Investors were worried after Reserve Bank of India (RBI) kept repo rate unchanged at 6% and Reverse Repo rate was also maintained at 5.75%. Besides, the dollar's gains against some other currencies overseas coupled with lackluster trade in the equity markets also weighed on the rupee sentiments. However, losses were limited as some support came with domestic brokerage report which highlighted that there will be minimal impact on inflation from the government's decision to fix support prices for the upcoming Kharif crops like paddy at least 50% higher than the cost of production. On the global front, dollar lost half a percent against yen on Wednesday, handing back earlier gains, as investors remained cautious after a heavy selloff in stock markets, and with many viewing the Japanese currency as undervalued. Finally, the rupee ended at 64.28, 3 paise weaker from its previous close of 64.25 on Tuesday.


The FIIs as per Wednesday data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 6511.16 crore against gross selling of Rs 8229.49 crore, while in the debt segment, the gross purchase was of Rs 1937.58 crore with gross sales of 1468.00 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.31 crore against gross selling of Rs 0.11 core.


US markets ended the choppy trade in red on Wednesday after a disappointing Treasury auction renewed concerns about rising rates, spooking investors' sentiments. Asian markets were trading mixed after European markets rebounded strongly overnight and U.S. equities closed modestly lower overnight in the final hour of trading. The Japanese stock market is rising on Thursday on the back of a weaker yen. Indian shares closed lower for the seventh straight session on Wednesday, as global sentiment turned pessimistic and the RBI warned of higher government spending feeding into inflation after keeping interest rates unchanged. Today the start is likely to be mildly in the green after RBI said inflation will moderate in the second half of FY19 on the back of base effect. A sharp fall in oil prices may also ease investor concerns surrounding inflation and rising twin deficits. Traders will also get some support with ASSOCHAM chief's statement that the RBI's decision to keep the policy rate unchanged is on the expected lines, though the less than hawkish stance has come about as a relief for the industry which had even feared a possible hike in the lending rates, following inflationary concerns. Meanwhile, Moody's said that the global green bond issuances are likely to surge by 60 per cent to a record $250 billion this year, with India and China leading the emerging markets in this space. Stocks related to public sector banks (PSBs) will be in focus after Economic Advisory Council to the Prime Minister (EAC-PM) chairman Bibek Debroy said that accretion of fresh non-performing assets (NPAs) of PSBs has virtually stopped. However, according to recent Reserve Bank data, bad loans of Public sector banks (PSBs) stood at Rs 7.34 lakh crore by the end of second quarter this fiscal, a bulk of which came from corporate defaulters. There will be lots of important earnings announcements too, to keep the markets buzzing.


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Tata Motors






  • Yes Bank has successfully completed issuance of its maiden $600 million bond issue in the international debt markets.
  • Tata Motors' subsidiary -- Jaguar Land Rover has reported a rise of 3% in global sales to 49,066 units in January 2018.
  • Hero MotoCorp has unveiled an exciting new range of products at the Auto Expo - The Motor Show 2018.
  • Cipla has reported 4.82% rise in its consolidated net profit at Rs 403.45 crore for Q3FY18 as compared to Rs 384.91 crore for Q3FY17.
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