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NSE Intra-day chart (14 March 2017)
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Market Commentary 15 March 2017
Markets to make a soft start on weak global cues

Indian benchmark equity indices staged a blockbuster performance on the first day of the new week by vivaciously rallying over one and half percent in the session and conquering their important psychological levels. Investors continued to build hefty positions across the board as sentiments got a boost from BJP's stunning victory in Uttar Pradesh assembly elections, which gives it room for adding more representatives in the Rajya Sabha. On Saturday, the BJP won an unexpected 312 out of 403 seats in the assembly elections of the India's largest state, raising expectations of continued political stability, smooth implementation of a proposed goods and services tax and reforms in areas such as labour laws and land acquisition. Furthermore, Investors' morale also remained upbeat as Industrial production bounced back into expansion in January, kicking off the financial year's last quarter on a positive note albeit amid expectations that it will bear the brunt of demonetisation. The index of industrial production (IIP) rose 2.7% in January from a year ago, the second fastest monthly growth this financial year behind 5.7% recorded in November 2016. Some support also came with the report that India's foreign exchange reserves rose $1.2 billion to reach $364 billion as on February 17, 2017. Buoyed by a strong domestic market and a stable Rupee, the central bank has been buying foreign currency in order to strengthen its foreign exchange reserves. However, markets participant didn't give any response to wholesale price index-based inflation (WPI), which jumped to a 39-month high of 6.55% in February compared to 5.25% in the previous month on the back of expensive food and fuel items, even as manufacturing products saw a decline in inflation. The data justifies the Reserve Bank of India's caution on loose monetary stance amid expected increase in interest rates in the United States in the next few days. Finally, the BSE Sensex surged 496.40 points or 1.71% to 29442.63, while the CNX Nifty was up by 152.45 points or 1.71% to 9,087.


The US markets closed lower on Tuesday, as persistent slump in oil prices put pressure on energy shares, while investors were also making guarded moves as the Federal Reserve's two-day Federal Open Market Committee meeting got underway. The FOMC meeting kicked off early Tuesday, with the market seeing a 93% probability that the Fed will vote for an interest-rate increase, according to data from the CME Group. The US central bank's statement and new economic projections would be released late Wednesday, followed by a news conference hosted by Fed Chairwoman Janet Yellen. The FOMC's policy statement will be examined for signals about the timing and pace of future interest-rate hikes. On the economy front, small-business owner optimism dipped in February but stayed near long-time highs, as owners remain hopeful about more business-friendly policy from Washington. The sentiment gauge from the National Federation of Independent Business fell 0.6 points to 105.3. The Dow Jones Industrial Average lost 44.11 points or 0.21 percent to 20,837.37, the Nasdaq was down 18.96 points or 0.32 percent to 5,856.82, while S&P 500 dropped 8.02 points or 0.34 percent to 2,365.45. 


Crude oil futures slid further on Tuesday, as Saudi Arabia triggered doubts that OPEC is following through with its supply quota plan. Saudi Arabia pushed oil production back above 10 million barrels a day, which deepened fears of a global supply glut. On the same time, OPEC acknowledged growing US output and stubbornly high stockpiles kept price gains in check and contained prices within a tight range. The OPEC report revealed that output soared to 9 million barrels a day in February, up 430,000 barrels a day from September 2016. Benchmark crude oil futures for May delivery declined by $0.68 or 1.4 percent to $47.72 on the New York Mercantile Exchange. In London, Brent crude for May delivery ended lower by $0.42 at $50.92 on the ICE.


Continuing its appreciation, the rupee was back to 65 levels on Tuesday, posting its biggest single-day gain to hit the 16-month high against the US dollar, due to selling of greenback by banks and exporters amid higher foreign inflows following BJP's resounding win in UP and positive IIP numbers. Also, the Index of Industrial Production (IIP) rose to 2.7 per cent in January this year, with all three tracked sectors of mining, electricity and manufacturing registering positive growth. Traders overlooked the surge in WPI inflation numbers, which came at a 3 year high. On the global front, the dollar inched up against a basket of currencies on Tuesday, as U.S. Treasury yields extended their rise ahead of an expected interest rate rise by the Federal Reserve. Finally, the rupee ended at 65.82, 77 paise stronger from its previous close of 66.59 on Friday.


The FIIs as per Tuesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 4717.37 crore against gross selling of Rs 4373.39 crore, while in the debt segment, the gross purchase was of Rs 1056.00 crore with gross sales of Rs 718.76 crore.


The US markets turned lower in the last session ahead of Wednesday's interest rate decision from the Federal Reserve. Also the energy stocks continued their decline after the crude oil futures extended steep recent losses. The Asian markets have made a soft start following the decline in US markets overnight, with some of the indices trading lower by about half a percent ahead of an expected interest-rate hike by Federal Reserve policy makers. The Indian markets bucking the trend rallied in the last session and the benchmarks surged to their record highs, reacting to the assembly election results and improvement in Industrial output. Today, the start is likely to be cautious and the markets may give up some gains amid weak global cues, as the US central bank is almost universally expected to raise its benchmark interest rates, a move that just a few weeks ago was viewed by the markets as unlikely. Traders will also be concerned with the Retail or CPI inflation rising to 3.65 percent in February, as compared to 3.17 per cent in January and 5.26 per cent a year ago, mainly on account of surge in price of food items. Meanwhile, Chief Economic Advisor Arvind Subramanian has said that demonetisation can be called successful only if the amount of currency in circulation comes down over time and there is an increase in tax compliance. The PSU oil marketing companies will keep buzzing, as the international crude oil prices slid to the lowest since late November after OPEC reported a rise in global crude inventories and raised its forecast of production in 2017 from outside the group.


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  • Tata Motors' subsidiary -- Jaguar Land Rover has started construction work on a £200 million redevelopment of its design and engineering centre at Gaydon.
  • Tech Mahindra has selected Jacada Inc to accelerate the digital transformation of customer operations for clients across industries.
  • ACC has sold its entire shareholding comprising 2,36,50,000 equity shares of Rs 2 Face Value representing 12.13% of the equity share capital in Shiva Cement.
  • Mahindra and Mahindra's South Korean subsidiary SsangYong Motor, has sold a total of 10,816 units in February 2017.
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