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NSE Intra-day chart (22 January 2018)
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Market Commentary 23 January 2018
Markets to make positive start on supportive global cues

Extending their record hitting spree for fourth consecutive day, Indian equity benchmarks once again settled at fresh closing high levels, with Nifty conquering its crucial 10,950 mark, while Sensex ended tad below its crucial 35,800 level. After making an optimistic start, domestic gauges gained momentum in second half of trade, as traders took some encouragement with report that overseas investors have put in a whopping Rs 87 billion in the Indian capital markets this month so far on expectation of recovery in corporate earnings and attractive yields. This follows an investment of Rs 2 trillion in the capital markets (equity and debt) in the entire 2017. Some support also came after a report enlightened that a greater proportion of provident fund savings could be headed for the stock market with shares rising to successive records in past weeks. Such a move could more than double the provident fund money invested in exchange-traded funds (ETFs) over time. The government is considering a plan to raise the equity investment limit for the Employees' Provident Fund Organisation (EPFO) to 25% from 15%. Traders also got some support with IMF Chief Christine Lagarde and Norway's Prime Minister Erna Solberg's statement that raising women's participation in the labour force to the same level as men can boost India's Gross Domestic Product (GDP) by 27 per cent. Private report stating that India will overtake China to be the fastest growing large economy in 2018 and the country's equity market will become the fifth largest in the world, too aided sentiments. The report added that while the rest of the world offers low growth and insufficient structural change, India, by contrast, is seen as a reforming economy with the prospect of strong long-term growth. Finally, the BSE Sensex surged 286.43 points or 0.81% to 35,798.01, while the CNX Nifty was up by 71.50 points or 0.66% to 10966.20.


The US markets closed higher on Monday, as the Senate approved a procedural bill that clears the way to ending a shutdown of the US government. Lawmakers failed Sunday to end the federal government closure, as negotiations over immigration continued to roil Capitol Hill. However, on Monday, the Senate approved a procedural vote that sets the stage to fund the government through February 8. The next step would be for Senate to pass the actual bill to finance the government and send it to the House. The International Monetary Fund warned policymakers to be on guard for the next recession even as it predicted global growth will accelerate to the fastest pace in seven years as US tax cuts spur businesses to invest. The fund raised its forecast for world expansion to 3.9 percent this year and next, up 0.2 percentage point both years from its projection in October. That would be the fastest rate since 2011, when the world was bouncing back from the financial crisis. The Dow Jones Industrial Average added 142.88 points or 0.55 percent to 26,214.60, the Nasdaq gained 71.652 points or 0.98 percent to 7,408.03, and the S&P 500 edged higher by 22.67 points or 0.81 percent to 2,832.97.


Crude oil futures ended higher on Monday after a top Saudi official said that Organization of the Petroleum Exporting Countries (OPEC) should extend its supply quota plan beyond this year. Adding to this, the Baker Hughes oil rig count, an indication of future crude oil production, slipped five to 747 on Friday. This bullish indicator was countered by OPEC's monthly report, forecasting that oil supply from non-OPEC countries to grow in 2018. Moreover, geopolitical tensions in the Middle East have also lent support to crude oil prices. According to the Al Jazeera, tensions rose as Turkey sent troops to the Syrian Kurdish group YPG stronghold. The US considers the YPG its closest ally in Syria, viewing it as the most effective ground force in the fight against the Islamic State. Benchmark crude oil futures for February delivery gained by 25 cents or 0.4% at $63.62 a barrel on the New York Mercantile Exchange. Brent crude for March delivery was up by 24 cents 0.35% percent to $68.85 a barrel on the ICE.


Indian rupee ended marginally lower against dollar on Monday, on mild demand for the American currency from importers and banks. However, a strong domestic equity market capped the rupee's losses. Traders remained cautious with a private report pointing out that India's fiscal deficit is expected to increase to 3.5% of GDP in 2018-19 but it will not have any material impact on macro stability risks. As per the report, fiscal deficit target may widen to 3.5 per cent of GDP in 2018-19 from 3.4 per cent in 2017-18. Meanwhile, domestic equity markets hit record closing highs for a fourth straight session on Monday. On the global front, the dollar was pinned near a three-year low on Monday, as a US government shutdown encouraged investors to add to bearish bets against the greenback. Finally, the rupee ended at 63.88, 4 paise weaker from its previous close of 63.84 on Friday.


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 6214.90 crore against gross selling of Rs 5127.06 crore, while in the debt segment, the gross purchase was of Rs 1913.85 crore with gross sales of Rs 118.01 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.98 crore against gross selling of Rs 5.83 crore.


The US markets ended higher on Monday, as traders did not paid much attention to the subsequent government shutdown but saw further upside amid signs that the shutdown will be resolved. Asian markets have made a jubilant start and are heading for fresh all-time highs, as investors turn with optimism toward the earnings season after the U.S. government shutdown moved toward an end. Japanese market edged higher ahead to the Bank of Japan's monetary policy decision due later in the day. The Indian markets continued their jubilant run and ended at fresh record closing high levels in previous session, with a private report enlightening that a greater proportion of provident fund savings could be headed for the stock market with shares rising to successive records in past weeks. Today, the start is likely to be on a positive side, tailing firm global cues. Traders will get some encouragement with report that the International Monetary Fund (IMF) revising its forecast for world economic growth in 2018 and 2019, saying sweeping US tax cuts were likely to boost investment in the world's largest economy and help its main trading partners. Sentiments may also remain buoyant after IMF and the World Bank have pegged India's growth in FY18 to be around 6.7%, which is a tad higher than the 6.5% projected earlier. Traders may also get some support from report that India has moved up on a global index of talent competitiveness to the 81st position, but remains a laggard among the BRICS nations. Meanwhile, banking shares will remain in focus on Assocham-Crisil's report that India's banking sector will be saddled with gross non-performing assets (GNPAs) worth a staggering Rs 9.5 lakh crore by March-end, up from Rs 8 lakh crore in the year-ago period. The high level of stressed assets in the banking system however provide enormous opportunity for asset reconstruction companies (ARCs) which are important stakeholders in the NPA resolution process.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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Yes Bank






  • Bharti Airtel has received an approval for acquisition of around 5% equity shares of Bharti Teleports.
  • Maruti Suzuki India is planning to introduce around four new products in the next 12 to 18 months.
  • Infosys has entered into a strategic partnership with the A.S. Watson Group.
  • ONGC has received an approval for acquisition of entire 51.11% shareholding of the President of India in HPCL.
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