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NSE Intra-day chart (13 April 2016)
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Market Commentary 18 April 2016
Markets to make a soft start of the new week on weak global cues


The local equity markets rallied for the third day in a row on Wednesday, as data showing easing inflation and forecast for an above-average monsoon rains sparked hopes for the economic growth and for more rate cuts by the Reserve Bank of India. Besides, strength among the global peers amid rally in commodity and crude oil prices on reports of Russia-Saudi Arabia agreement to freeze output, further buoyed sentiment. On the macroeconomic front, India's industrial production expanded at 2% year-on-year in February after staying negative for the last three months on better performance of mining, power and consumer goods, while retail inflation in March fell to a six-month low of 4.83% on account of cheaper food articles such as vegetables and pulses. On the global front, all the major Asian equity indices finished in the positive terrain, European markets too mirrored the sanguine Asian cues. Back home, the benchmark got off to a rollicking opening as investors rejoiced an above normal monsoon forecast after two straight years of drought, while easing inflation and rebound in industrial output also boosted sentiment. The frontline indices soon gathered momentum and traded with over a percent gains through the morning session of trade. Second half of the session saw the key gauges capitalize on the momentum further and spurt to session's highest levels in dying hour. However, a mild profit booking in dying moments of trade ensured that the key indices shut shops off the intraday highs. Finally, the BSE Sensex surged 481.16 points or 1.91% to 25626.75, while the CNX Nifty rallied 141.50 points or 1.84% to 7,850.45. Indian markets remained closed on Thursday and Friday for local holidays.


The US markets made a modestly lower closing on Friday after showing lackluster performance throughout the trading session, mainly due to a steep drop by the price of crude oil, which pulled back further off its recent highs. Traders also digesting the latest batch of US economic data, including an industrial production report from the Federal Reserve showing a much bigger than expected drop in industrial production in March. The industrial production fell by 0.6 percent in March, matching the downwardly revised drop reported for February. The bigger than expected decrease was primarily due to steep drops in mining and utilities output, although manufacturing output also fell 0.3 percent. Also a report from the University of Michigan showed an unexpected deterioration in consumer sentiment in the month of April. The preliminary reading on the consumer sentiment index for April came in at 89.7 compared to the final March reading of 91.0. However, traders largely shrugged off a report from the New York Fed showing a faster than expected expansion in regional manufacturing activity in April. The Dow Jones Industrial Average declined by 28.97 points or 0.16 percent to 17,897.46, the Nasdaq lost 7.67 points or 0.16 percent to 4,938.22 and the S&P 500 ended lower by 2.05 points or 0.10 percent to 2,080.73.


Crude oil futures slumped on Friday ahead of the weekend's highly anticipated meeting between major oil producers in Doha, Qatar, to discuss a potential output freeze. Officials from Saudi Arabia, Russia and others are gathering in to discuss an output freeze that could put a floor under crude oil prices. Traders even shrugged off earlier data showing that China's gross domestic product rose by an annualized rate of 6.7% in the first quarter, in line with market expectations. Prices however briefly pared some of their earlier losses after Baker Hughes reported that the number of active US oil rigs fell by 3 to 351. That was the fourth weekly decline in a row. Benchmark crude oil futures for May delivery surged by $1.14 or 2.10 percent to $40.64,on the New York Mercantile Exchange. In London, Brent crude for June delivery ended at $43.04, down $0.78 or 1.78 percent on the ICE.


Snapping its three days gaining streak, Indian rupee depreciated against dollar on Wednesday on increased demand for US currency from importers amid losses in Asian currencies. The domestic currency erased its early gains to end weaker. Rupee failed to get support from the positive momentum in the domestic equities. Meanwhile, traders avoided long positions owing to a shortened week. The currency market will remain closed on Thursday on account of Ambedkar Jayanti and on Friday on account of Ram Navmi. On global front, Yen retraced from the highs, as Japanese authorities cautioned that the prevalent trend in Yen is weak which can intervene in order to weaken the currency. Finally, the rupee ended at 66.64, 22 paise weaker from its previous close of 66.42 on Tuesday.


The FIIs as per Wednesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 3227.75 crore against gross selling of Rs 2799.48 crore, while in the debt segment, the gross purchase was of Rs 3391.02 crore with gross sales of Rs 3318.64 crore.          


The US markets ended marginally in red in last session weighed down by energy stocks, though Dow managed to post its largest weekly gain in a month with Chicago Fed President Charles Evans stating that investors should expect only modest increases in interest rates this year. The Asian markets have made mostly a weak start on slump in crude prices after major oil producers failed to reach an agreement to curtail production in Doha over the weekend. The Indian markets had rallied before going for a long weekend with major indices posting gains of near to two percent on hopes of good monsoon. Today, the start of another truncated week is likely to be soft, tailing the weakness in the other global markets. Traders will also be concerned with a quarterly employment survey report of Labour Bureau, a wing of Labour Ministry, which has said that employment generation in eight key sectors, including gems & jewellery, handloom, leather and automobiles, was at seven-year low of 1,35,000 jobs in 2015. Moreover, the October-December quarter of 2015 saw job losses of 20,000 in eight key sectors compared to previous quarter. Also, the International Monetary Fund (IMF) in its latest edition of the World Economic Outlook (WEO) has warned that while several demand and supply-side factors have resulted in a sharp fall in inflation and have given the Reserve Bank of India space to cut interest rates, there are several factors that could drive inflation up again. The IT stocks will be in action after Infosys reported a stellar Q4 numbers during the weekend, the company's full-year revenue growth came in at 9.1% in actual currency terms and it gave a bold guidance of 11.8-13.8% for the 2016-17 financial year. Today, the largest IT company of the country TCS will be announcing its numbers. The FMCG stocks too may be buzzing with a private survey showing that household consumption of fast-moving consumer goods in rural areas grew at almost double the pace of urban areas in 2015.


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  • Cipla's subsidiary Cipla Health has allotted shares to FIL Capital Investments and consequently, the transaction has now been completed.
  • Mahindra & Mahindra's Farm Equipment Sector has launched new range of tractor Yuvo in Madhya Pradesh.
  • ICICI Bank, India's largest private sector bank, has opened a new branch at industrial area in Meerut.
  • IndusInd Bank has inaugurated a new branch located at Jajodia Complex, Lahkothi, Ratu Road, Ranchi.
  • Reliance Industries has floated an Expression of Interest to develop its oil and gas blocks, including some of the discoveries in the KG-D6 block off the coast of Andhra Pradesh.
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