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NSE Intra-day chart (21 February 2017)
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Market Commentary 22 February 2017
Markets to make a positive start on supportive global cues

Indian benchmark indices carried forward their northbound journey for yet another session on Tuesday on sustained buying by funds and retail investors ahead of February series F&O expiry on Thursday. Sentiments got a boost with report that yearly SBI Composite Index (year-on-year) for February 2017 improving to 49.5 compared to last month's index of 47.0, indicating some improvement in sentiments. The monthly Index though declined marginally to 49.2 in February 2017 from 50.9 in January 2017, which means IIP growth may continue to contract in January and February 2017. Some support also came with the report that the government hopes to overshoot the Rs 45,500 crore disinvestment target for the current fiscal amid strengthening of equity markets. However, gains remained capped with the rating agency ICRA's  report indicating that the economy based on the gross value added (GVA) is set to slip to 6.2% in the December quarter from 6.9% a year ago and GDP growth will decline to 6.5% from 7.2%. The slippages will be driven by the slowdown in growth of the industry and services, offsetting the healthy agricultural expansion during the period. Furthermore, a private report indicated India's growth momentum witnessed a recovery in January but it is not broad-based and overall economic activity remains below pre-demonetization levels. The slowdown that started in the October-December quarter of 2016, post demonetization is spilling over into the first quarter of 2017 (January-March). Meanwhile, some steel stocks gained traction as the government has extended anti-dumping duty on import of certain steel products from China for five years with an aim to protect domestic players from the cheap shipments. The levy has been imposed in the range of $961.33 - 1,610.67. Furthermore, Telecom stocks slipped as Reliance Jio's free data offer has hit rivals, raising concerns about competition and margins in the sector. Jio has launched the new Jio Prime subscription plan that offers the same free data and other services, customers have received as part of the Happy New Year plan for another 12 months at Rs 303 per month. Finally, the BSE Sensex surged 100.01 points or 0.35% to 28761.59, while the CNX Nifty was up by 28.65 points or 0.32% to 8,907.85.


The US markets closed higher on Tuesday, with major indexes simultaneously closing at records for a second session in a row on the back of gains in defensive sectors and energy, even as concerns remained about the market's valuation. On the economy front, momentum in both the US manufacturing and service sectors slowed in February. The Markit flash US manufacturing purchasing managers index fell to a seasonally adjusted reading of 54.3 from 55 in January. A similar gauge for services slipped to 53.9 from a 14-month high of 55.6 in the prior month. Both indices slipped to two-month lows. Any reading below 50 indicates more respondents said conditions are getting worse than getting better. The flash estimate is based on about 85%-90% of respondents each month. The Dow Jones Industrial Average added 118.95 points or 0.58 percent to 20,743.00, the Nasdaq was up 27.37 points or 0.47 percent to 5,865.95, while S&P 500 gained 14.22 points or 0.60 percent to 2,365.38. 


Crude oil futures moved higher on Tuesday on OPEC's optimism for greater compliance with its deal with other producers including Russia to curb output in an effort to clear a glut that has weighed on the market. OPEC Secretary General Mohammad Barkindo told an industry conference in London that "We are going to go for much higher levels of compliance because of the very high level of stocks that we have brought over with us from 2016." Though, Barkindo said it was too early to say if the supply cut, which lasts for six months from Jan. 1, would need to be extended or deepened at the next OPEC meeting in May. Benchmark crude oil futures for April delivery gained $0.55 or 1 percent to $54.33 in electronic trading on the New York Mercantile Exchange. In London, Brent crude for April delivery ended up by $0.48 or 0.9 percent at $57.31 on the ICE.


Indian money markets remained closed on Tuesday on account of a local holiday.


The FIIs as per Monday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 13274.72 crore against gross selling of Rs 5215.43 crore, while in the debt segment, the gross purchase was of Rs 487.71 crore with gross sales of Rs 437.32 crore.


The US markets coming after a long weekend scaled fresh record highs in the last session, amid optimism about more business friendly policies under President Donald Trump. The Asian markets have once again made a mixed start, as the dollar fell against most major currencies while oil extended a rally. The Japanese market was however struggling amid a strengthening yen. The Indian markets coming off their initial choppiness surged in the final hours of the last session to post their fourth consecutive day of gains, with Nifty closing above the crucial 8900 mark. Today, the start of the penultimate session of the F&O series expiry is likely to be in green and the major indices will be extending the gains. Traders will be getting some support with a private report stating that India's millennial population is a massive disruptive force and driven by this supportive demographics alongwith government's policy action, Indian economy is likely to reach $ 5 trillion by 2025. Also, the government hopes to overshoot the Rs 45,500 crore disinvestment target for the current fiscal amid strengthening of equity markets. The Finance Ministry has cleared disinvestment in two more PSUs last week. Meanwhile, Prime Minister Narendra Modi has pressed the US to have a 'balanced and farsighted perspective' on the movement of skilled professionals, remarks which came against the backdrop of the Trump Administration's move to curb H1B visas that will hurt India. Commerce and Industry Minister Nirmala Sitharaman too said that the issue has been discussed in detail with a group of US Congressmen. The banking stocks will see some action, as the newly-appointed Reserve Bank deputy governor Viral V Acharya has called for some urgent steps to resolve NPAs, saying none of the "piece-by-piece approach" offered so far has worked, including the AQR, simply because of "the many discretions given to banks" as also their "skewed incentive system".


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  • Tata Motors has displayed a concept car called the 'C-Cube', at the Future Decoded 2017, a digital transformation event.
  • Along with Waterlife India and the village panchayat, Maruti Suzuki India has inaugurated a Water ATM plant in Bas Hariya village in Manesar.
  • TCS has received its board approval for proposal to buy back up to 5.61 crore equity shares for an aggregate amount not exceeding Rs 16,000 crore.
  • Tata Steel's Katamati iron mine has been conferred the Best Green Organisation of the Year Award at the Global Green Future Leadership Awards.
News Analysis