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NSE Intra-day chart (10 March 2016)
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Market Commentary 11 March 2016
Markets to extend the consolidation mood with a mildly soft start


A session after showcasing a vivacious rally, Indian equity indices faltered and failed to extend the winning momentum on Thursday due to profit booking in frontline blue chip stocks amid mixed global cues. Sentiments got undermined after International Monetary Fund (IMF) stated that the government must prioritize clean-up of its banks balance sheets and tackle corporate debt overhang, additionally cautioning against the risk of potential capital outflows, IMF warned of further downward revision to global growth estimates at upcoming spring meetings, calling for policymakers to adopt a more comprehensive plan to strengthen growth prospects. However, buying in metal stocks after cabinet cleared an amendment in the new mining law pulled the benchmark indices from day's low. Some buying was also witnessed in oil exploration majors after the government announced a new Hydrocarbon Exploration & Licencing Policy, in an effort to boost production and also to streamline several hurdles faced by oil exploration companies. Meanwhile, market participants got some comfort with Prime Minister Narendra Modi making a fresh pitch for passage of GST and other legislations in the Rajya Sabha, considering the 'conducive atmosphere' that has been prevailing in Parliament this session with cooperation from the opposition. On the global front, Asian markets ended mostly in green on Thursday, while European stocks edged lower in early deals. Bach home, after getting positive start, Indian benchmarks immediately slipped into negative territory and enlarged their losses in late morning session as investors booked profits ahead of Index of Industrial Production (IIP) data for January slated to be released tomorrow. Markets remained under pressure for most part of the session weighed down by selling pressure in Capital Goods and technology stocks. Finally, the BSE Sensex plunged by 170.62 points or 0.69% to 24623.34, while the CNX Nifty dropped 45.65 points or 0.61% to 7,486.15.


The US markets closed mostly lower on Thursday, as investors digested new easing measures from the European Central Bank and as crude futures declined. On the economy front, the federal government ran a budget deficit of $193 billion in February, just slightly higher than the $192 billion recorded in the same month a year ago. Total spending for the month was $362 billion, or 9% more than a year ago. Spending rose for interest payments on the public debt, Medicare and Medicaid benefits and veterans' programs, among other budget areas. Receipts totaled $169 billion, up 21% from last February. Individual income and payroll taxes rose by 12%. In a separate report, the Congressional Budget Office stated that those tax receipts were boosted in part by the extra business day in February. For the fiscal year to date, the budget deficit is down 9%. The government's fiscal year runs from October through September. On the other hand, the number of Americans who applied for unemployment benefits fell by 18,000 in the first week of March, stretching from February 28 to March 5, setting a five-month low of 259,000 and reflecting a low rate of layoffs in a steadily growing economy. The Dow Jones Industrial Average lost 5.23 points or 0.03 percent to 16,995.13, the Nasdaq was down 12.22 points or 0.26 percent to 4,662.16 while, the S&P 500 gained 0.31 points or 0.02 percent to 1,989.57. 


Crude oil futures gave up some of their gains of previous session, slipping from their three months high on Thursday, on some report that a highly-anticipated meeting between OPEC and Non-OPEC producers will not be held unless the top participants can win the support of a defiant Iran. Traders were also doubtful about the stimulus measures from the European Central Bank will jump start the region's faltering economy. Benchmark crude oil futures for April delivery lost $0.51 or 1.36 percent to $ 37.78 a barrel after trading in a range of $37.22 and $38.47 a barrel on the New York Mercantile Exchange. In London, Brent crude for May delivery closed at $40.08, down $1.03 or 2.48 percent on the ICE.


Indian rupee appreciated for the second consecutive session against dollar on Thursday on increased selling of the American currency by exporters and banks. Some support came with Prime Minister Narendra Modi making a fresh pitch for passage of GST and other legislations in the Rajya Sabha, considering the 'conducive atmosphere' that has been prevailing in Parliament this session with cooperation from the opposition. Nevertheless, a weak trade in domestic equities and dollar's strength against other currencies overseas capped the rupee gains. Meanwhile investors maintained a cautious approach ahead of Index of Industrial Production (IIP) data for January scheduled to be released on March 11, 2016.  On the global front, euro fell against the dollar on Thursday, anticipating further policy easing by the European Central Bank. Finally, the rupee ended at 67.07, 14 paise stronger from its previous close of 67.21 on Wednesday.


The FIIs as per Thursday's data were net buyers in equity segment while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 5147.14 crore against gross selling of Rs 4249.26 crore, while in the debt segment, the gross purchase was of Rs 1496.43 crore with gross sales of Rs 1922.94 crore.         


The US markets made a flat closing last day after a volatile session, as traders digested the European Central Bank's announcement of a package of stimulus measures designed to boost the struggling economy. Most of the Asian markets have made a weak start, heading for their first weekly drop in a month. The Japanese market was leading the losers, as yen strengthened and on concerns global policy makers have lost their potency. The Indian markets after trading choppy, posted loss of over half a percent in last session. Today, the start is likely to remain cautious and the consolidation started in last session may linger, with benchmarks trading in a range in early deals, tailing the weakness in other Asian markets after ECB chairman Mario Draghi said the bank would consider further rate cuts only in extreme cases. Traders may get some support with IMF's financial counselor Jose Vinals statement that India needs to address the stress emanating from leveraged corporate balance sheets and asset quality woes of state-run banks to sustain the recovery process, even as the country is best placed among emerging markets. The oil & gas stocks will be in action, with the Hydrocarbon Exploration and Licensing Policy (HELP) announced yesterday companies will require to acquire just one licence to manage all kinds of hydrocarbon reserves such as oil, gas, shale and coal bed methane. The realty sector stocks too will keep buzzing with Rajya Sabha passing the much-awaited real estate bill. According to the bill, builders will have to deposit a minimum of 70% collections from buyers in a separate escrow account to cover cost of construction and land. State-level Real Estate Regulatory Authorities will be established to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover. The banking stocks too will be in action, as the Credit rating agency Crisil downgraded eight PSBs including Bank of India and Canara Bank, following deterioration in their asset quality and also revised the outlook on five of them to negative.


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  • Tata Motors and IIT Bombay have signed a Memorandum of Understanding to create a technological partnership in areas of mutual benefit and interest.
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