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NSE Intra-day chart (10 January 2018)
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Market Commentary 11 January 2018
Markets to make soft start on weak global cues

Indian equity benchmarks ended the choppy day of trade with minimal losses, as traders remained on sidelines ahead of ahead of key corporate earnings later this week and the federal budget next month. Market participants also opted to stay away from buying risky assets ahead of the outcome of meeting organised by government think tank NITI Aayog, and attended by a host of ministers including Finance Minister Arun Jaitley, NITI Aayog functionaries and leading economists. Some concerns also came with rating agency ICRA's latest report stating that credit growth of Infrastructure finance firms will remain subdued over the short term. However, losses remained capped with the World Bank projecting India's growth rate to 7.3 per cent in 2018 and 7.5 for the next two years. It said that with an “ambitious government undertaking comprehensive reforms”, India has “enormous growth potential” compared to other emerging economies. The 2018 Global Economics Prospect released by the World Bank also said that India, despite initial setbacks from demonetisation and Goods and Services Tax (GST), is estimated to have grown at 6.7 per cent in 2017. Traders also got some solace with domestic rating agency CRISIL expecting India Inc's revenue growth to hit a five-year high of 9 per cent for the October-December 2017 period, on higher realizations in steel, aluminium, cement and crude oil-linked sectors, and a pick-up in consumption-driven sectors such as auto and aviation. However, profits will continue to contract, primarily due to the rising commodity prices. Traders also took some comfort with the Cabinet approving key changes in India's Foreign Direct Investment (FDI) policy by easing investment norms across sectors including aviation, construction and single brand retail among others. These amendments are government's broader strategy to liberalize and simplify the FDI policy to facilitate ease of doing business and turn India into a global investment hotspot. Finally, the BSE Sensex slipped 10.12 points or 0.03% to 34,433.07, while the CNX Nifty was down by 4.80 points or 0.05% to 10,632.20.


The US markets closed lower on Wednesday, with the S&P 500 and Nasdaq logging their first decline in 2018, as traders kept an eye on US bonds following an accelerated rise in the yield on the 10-year Treasury note, prompted by a report that China is considering halting purchases of US debt. After the record run, Wednesday's pullback was seen as merely a pause in the rally as traders took the chance to take some profits. On the economy front, the cost of goods imported into the US rose slightly in December and finished the year with a 3% increase - the biggest gain in six years. Although that's much higher than the 1.9% gain in 2016, it still reflects a generally low level of inflation. In December, import prices edged up a scant 0.1% after a big oil-inspired increase in the prior month. Minus energy import prices fell 0.1%. Export prices fell 0.1% in December, the government said. They rose 2.6% for all of 2017. The cost of oil and other forms of energy rose more slowly in December. Energy prices have a big impact on overall import inflation and they largely account for the increase in 2017. The Dow Jones Industrial Average lost 16.67 points or 0.07 percent to 25,369.13, the Nasdaq dropped 10.006 points or 0.14 percent to 7,153.57, and the S&P 500 edged lower by 3.06 points or 0.11 percent to 2,748.23.


Crude oil futures continued their upmove on Wednesday, extending 4-year highs amid further signs the global oil market is tightening. Traders cheered an unexpected drop in US production while data showing crude stockpiles fell for the eighth-straight week lifted sentiment. EIA reported that U.S. crude fell by roughly 4.95 million barrels for the week ended Jan. 5. Gasoline inventories rose by 4.14 million barrels, while supplies of distillate rose by 4.3 million barrels. Benchmark crude oil futures for February delivery ended higher by $0.61 or 0.97 percent at $63.57 a barrel on the New York Mercantile Exchange. Brent crude for March delivery was up by 0.44 percent to $69.12 a barrel on the ICE.


Halting a two-day slide, Indian rupee ended stronger against dollar on Wednesday, due to increased selling of the American currency by exporters and banks. Traders took support with the World Bank report projecting India's growth rate to 7.3% in 2018 and 7.5% for the next two years. It said that with an ambitious government undertaking comprehensive reforms, India has enormous growth potential compared to other emerging economies. Besides, weak dollar overseas largely supplemented strength to the local currency. However, gains were limited as some concerns remained among the investors with chief statistician TCA Anant's statement that lower-than-expected inflation is estimated to pull down nominal GDP growth to 9.5% in FY18, against the budgeted 11-11.5%. On the global front, dollar extended losses against yen on Wednesday after the Bank of Japan's move to trim Japanese government bond (JGB) purchases in the previous session triggered speculation that it could begin tapering its massive, ultra-easy monetary stimulus. Finally, the rupee ended at 63.60, 11 paise stronger from its previous close of 63.71 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 5028.52 crore against gross selling of Rs 5050.21 crore, while in the debt segment, the gross purchase was of Rs 2164.26 crore with gross sales of Rs 808.00 crore. Besides, in the hybrid segment, there was no gross buying against gross selling of Rs 3.55 crore.


The US markets despite coming off their lows ended marginally in red in the last session. Profit taking mainly contributed to the weakness after the major averages once again climbed to new record closing highs in the previous session. The Asian markets have made mostly a soft start and some indices in the region are down by over half a percent as rally mood showed signs of waning as the yen remained near a six-week high and traders dialed back their appetite for risky assets, there was jump in bond yields as the news broke that senior officials in Beijing have recommended slowing or halting purchases of U.S. bonds. The Indian markets after a range bound day of trade ended flat with negative bias in last session, as investors awaited cues from the Q3 earnings season and next month's Union Budget. Today, the start is likely to remain somber on sluggish global cues and traders will be eyeing the official start of the third quarter earnings season with quarterly earnings from TCS and IndusInd Bank due later in the day. Traders however, will be getting some support with global rating agency Moody's latest report, which has said India and China remain the fastest growth economies in Asia Pacific region. Also, on the domestic front the cabinet's decision to allow foreign airlines to invest up to 49% in ailing Air India, and ease foreign direct investment (FDI) policies in some critical areas, including single-brand retail, broking services in construction, pharmaceuticals and power exchanges, will keep the markets buzzing. Meanwhile, NITI Aayog Vice Chairman Rajiv Kumar after a meeting of Prime Minister Narendra Modi with country's leading economists said that employment generation was the key going forward. Agri related stocks will be in focus, as the economists during an interactive session with Prime Minister Narendra Modi, organised by NITI Aayog suggested need to shift focus to increasing farmers' income rather than increasing just production.


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  • Maruti Suzuki India has joined hands with the Delhi Police to implement a Traffic Safety Management System in the national capital.
  • ICICI Bank has signed a MoU with Ola to bring forth a range of integrated offers to their customers and driver-partners.
  • Infosys has announced the successful conclusion of an Advance Pricing Agreement with the US Internal Revenue Service.
  • SBI is planning for issuance of Long Term Bonds worth Rs 5,000 crore for financing of Infrastructure and Affordable Housing in domestic and overseas market.
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