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NSE Intra-day chart (17 January 2017)
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Market Commentary 18 January 2017
Markets to make a flat-to-cautious start


After trading on a feeble note for most part of the session, Indian benchmark indices ended in the negative terrain, as investors remained on the sidelines and refrained from any buying activity ahead of corporate results and the government budget. The government will unveil its Budget on February 1 and investors hope for incentives to support an economy hit by cash shortages after a ban on higher-value banknotes. Sentiments remained dismal with report that International Monetary Fund (IMF) cut India's growth forecast for the current fiscal by one percentage point, due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative. In an update of its flagship publication the World Economic Outlook, the IMF said India is likely to grow by 6.6% only in FY17, down from 7.6% estimated earlier and marginally behind China that is pegged to grow at 6.7% in 2016.  However, losses remained capped with report that the Goods and Services Tax (GST) Council on Monday broke a deadlock over issues of administrative control over assessees and broadly agreed to roll out the GST from July 1, instead of the earlier deadline of April 1. Under the proposed tax regime, 90% of all assessees with a turnover of Rs 1.5 crore or less will be assessed for scrutiny and audit by state authorities, the remaining 10% by the Centre. The Council also resolved a logjam over the right to tax economic activities within 12 nautical miles from India's coasts. Some support also came with the private report indicating that Indian consumers remain the most optimistic in the Asia-Pacific region and their outlook on economy and stock market showed highest levels of confidence even after their government's recent demonetisation measure. The report is based on a survey conducted across 17 markets in Asia Pacific, between November 2016 and December 2016. Finally, the BSE Sensex declined 52.51 points or 0.19% to 27235.66, while the CNX Nifty was down by 14.80 points or 0.18% to 8,398.00.


The US markets closed lower on Tuesday, as investors remained cautious in the wake of President-elect Donald Trump's charge that a strong dollar is hurting the economy. Trump's comments on the dollar over the weekend sent the currency sharply lower. Investors are taking Trump's comments as a sign that he may not be as open to a series of interest rate increases and a stronger dollar as had been initially projected. On the economy front, after reaching an 8-month high at the end of last year, an index of manufacturing conditions in the New York area pulled back in January. The Empire State's general business conditions slipped to 6.5 in January from a revised 7.6 in December. Readings of business and consumer confidence have surged for the most part since Donald Trump won the US election, in anticipation of lighter regulation and a cut in business taxes. New orders slumped to 3.1 in January from 10.4 in the prior month. Shipments performed better, holding at 7.3 from 8.6 in December. The Dow Jones Industrial Average lost 58.96 points or 0.30 percent to 19,826.77, Nasdaq dropped 35.39 points or 0.63 percent to 5,538.73, while S&P 500 was down 6.75 points or 0.30 percent to 2,267.89.


Crude oil futures moved higher on Tuesday but were well off the day's high amid lingering doubts that OPEC quotas will re-balance the oil market. Though, China reduced its production outlook by 7 percent and helped the crude to post some gains. Prices also got some support with weakness in dollar and Saudi Arabia saying it would adhere strictly to its commitment to cut output under the agreement between OPEC and other producers, such as Russia. Benchmark crude oil futures for February delivery was up by $0.11 or 0.2 percent to $52.48 on the New York Mercantile Exchange. In London, Brent crude for March delivery ended higher by $0.38 or 0.77 percent at $55.48 on the ICE.


Indian rupee strengthened for second consecutive session on Tuesday despite weak local equities, mainly on account of weakness of dollar against the basket of other major currencies. Local currency got some support with Goods and Services Tax (GST) Council reaching a consensus on the contentious dual control issue preparing ground for the rollout of the biggest tax reform from July 1, 2017. However, there was some cautiousness too with report that International Monetary Fund (IMF) cut India's economic growth estimate for 2016-17 to 6.6% from its earlier projection of 7.6% due to the impact of the government's move of demonetization of high value currency notes in early November. On the global front, pound steadied against dollar ahead of a speech by Prime Minister Theresa May later in the day on the UK's priorities regarding Brexit. Finally, the rupee ended at 67.96, 13 paise stronger from its previous close of 68.09 on Monday.


The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 2387.39 crore against gross selling of Rs 2725.90 crore, while in the debt segment, the gross purchase was of Rs 74.60 crore with gross sales of Rs 601.11 crore.  


The US markets made a soft closing in last session, coming after a long weekend and the tech-heavy Nasdaq pulled back off the record closing high set last Friday. The financial stocks contributed to the overall weakness on Wall Street. The Asian markets have made a mixed start with some indices trading modestly in red. The Japanese market too was in red on yen's strength on policy uncertainty ahead of Donald Trump's inauguration. The Indian markets lost their initial momentum and ended with modest cuts in last session, led by the market heavyweight RIL whose GRM came lower than expected. Today, the start is likely to be soft to cautious on mixed global cues. Though, there will be some support with an UN report claiming that India was still the fastest growing large developing economy and that the country would grow by 7.7 percent in the financial year 2017. The United Nations World Economic Situation and Prospects (WESP) 2017 report has said that India's economy is projected to grow by 7.7 percent in fiscal year 2017 benefiting from strong private consumption and gradual introduction of significant domestic reforms. The report also predicted a 7.6 percent growth for the financial year 2018. Traders will be eyeing the Reserve Bank of India Governor Urjit Patel's explanation to the decision of demonetisation and its effect on economy, while appearing before a parliamentary panel today. There will be some buzz in the renewable power companies stocks, as the minister of state with independent charge for power, coal, new and renewable energy and mines, Piyush Goyal has said that India is committed to meet its renewable energy goals and is not bothered about US president-elect Donald Trump's skepticism on policies related to climate change.


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  • Tata Consultancy Services has partnered with Aurus to enhance omnichannel payment solutions with OmniStore.
  • Bharti Airtel has unveiled an upgraded mobile network in Delhi-NCR.
  • Tata Power's total generation capacity from non-fossil fuel sources stands at 3133 MW, making it the largest renewable energy company in India.
  • HDFC Ergo General Insurance Company, a joint venture between HDFC and Ergo International AG, has raised Rs 350 crore through Non-Convertible Debentures to strengthen its capital base.
  • YES Bank has launched a unique Customizable Savings Account that gives the customers, the power to choose various features of a Savings Account.
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