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NSE Intra-day chart (22 February 2017)
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Market Commentary 23 February 2017
F&O series expiry session to get a positive start

Indian benchmark indices edged higher for the fifth consecutive session on Wednesday on account of short-covering by investors ahead of February month F&O expiry on Thursday. Besides, Index heavyweight Reliance Industries, which helped the markets to remain in green till last, made its presence felt by surging around eleven percent in the session, as investors cheered the company's move to end free telecom services on its Jio platform and start charging customers from April 1. Jio is seeking to retain customers through special prime memberships at a one-time fee of Rs 99 and Rs 303 a month for unlimited voice, data and content. Furthermore, the country's third largest private sector lender, Axis bank, gained as much as 3.9 percent, after the report that the government has no plan as of now to exit Axis Bank via SUUTI. Sentiments got some support with a private report stating that India's millennial population is a massive disruptive force and driven by this supportive demographics along with government's policy action, Indian economy is likely to reach $ 5 trillion by 2025.  Market participants got some comfort as Prime Minister Narendra Modi urged the United States to keep an open mind on admitting skilled Indian workers, in comments that pushed back against Republican President Donald Trump's 'America First' rhetoric on jobs. Moreover, India is likely to pitch for a global agreement to make it easier to travel for work across borders at international fora like the G-20 and BRICS as increasing protectionism in the West has unsettled the country's services industry, which accounts for about 60% in the country's GDP and 28% of total employment. Finally, the BSE Sensex surged 103.12 points or 0.36% to 28864.71, while the CNX Nifty was up by 19.05 points or 0.21% to 8,926.90.


The US markets closed mostly lower on Wednesday, while Dow eked out a slight gain to log its best record-setting streak in three decades. The broader equity benchmarks struggled as Federal Reserve minutes implied that the central bank is comfortable with raising interest rates fairly soon. Many Federal Reserve officials indicated their support for raising rates if the economy continued to strengthen, according to the minutes of the Fed meeting earlier this month. But the transcript also showed a mood of uncertainty over President Donald Trump's fiscal policy plans, which have been the biggest boost to stocks during the past few months. Most officials said it would take some time for the outlook on fiscal policy to become clearer. And only a couple of the 17 Fed officials argued that uncertainty over fiscal policy should not delay a near-term rate hike. More Fed officials cautioned against adjusting interest rates in anticipation of policy proposals that might not be enacted, or that, if enacted might turn out to have different consequences for economic activity and inflation than currently anticipated. On the economy front, sales of previously-owned homes hurtled to the highest in a decade in January, a sign of durable demand in the face of higher mortgage rates and leaner supply. The Nasdaq was down 5.32 points or 0.09 percent to 5,860.63, S&P 500 dropped 2.56 points or 0.11 percent to 2,362.82, while the Dow Jones Industrial Average added 32.60 points or 0.16 percent to 20,775.60.


Crude oil futures turned lower on Wednesday despite a late slump in the dollar, after the release of the Federal Reserve Open Committee (FOMC) minutes. Traders were awaiting the inventories data and expecting that U.S. stockpiles continued to soar last week, adding to the gargantuan surplus recorded earlier in February. There were concerns about growing output by producers outside of a pact to curtail global production weighed on crude futures. Benchmark crude oil futures for April delivery declined by $0.74 or 1.4 percent to $53.59 in electronic trading on the New York Mercantile Exchange. In London, Brent crude for April delivery ended down by $0.82 or 1.5 percent at $55.84 on the ICE.


Indian rupee ended marginally weaker against the US dollar on Wednesday due to fresh demand for the American currency from banks and importers. Traders remained cautious ahead of the release of Federal Reserve minutes to gauge when policymakers will raise interest rates again and for more US economic data including February's payrolls data. On the global front, yen was stronger against dollar on Wednesday, supported by comments from Bank of Japan Governor Haruhiko Kuroda who said that the chance of negative rates is low in the near future. Finally, the rupee ended at 66.96, 4 paise weaker from its previous close of 66.92 on Monday.


The FIIs as per Wednesday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 7039.61 crore against gross selling of Rs 8993.23 crore, while in the debt segment, the gross purchase was of Rs 433.00 crore with gross sales of Rs 391.68 crore.


The US markets consolidated a bit and made a mixed closing in the last session following the release of the minutes of the Federal Reserve's latest monetary policy meeting, though the Dow still managed to climb to another new record closing high. The Asian markets have made a mixed start like the US counterparts, after minutes from the Federal Reserve's latest meeting were deemed dovish. The Japanese market was in red as the yen strengthened. The Indian markets continued the rally mood supported by the unprecedented surge in market heavyweight Reliance Industries, though the major bourses came off their intraday highs but managed decent gains in last session. Today, the start of the F&O series expiry session is likely to be in green, though there will be some cautiousness too with US Fed minutes stating that it might be appropriate to raise interest rates again fairly soon if incoming data on the labor market and inflation is in line. Also, the International Monetary Fund (IMF) has said that India's growth is projected to slow to 6.6 percent in 2016-17 fiscal due to the strains that have emerged in the economy as a result of 'temporary disruptions' caused by demonetization. There will be some buzz in the banking stocks, as the Chief Economic Advisor (CEA) Arvind Subramanian has emphasised the need to move full steam to deal with the problem of bad loans facing banking sector. He said that the government is considering setting up a state-owned asset reconstruction company to deal with mounting bad loans. Oil & gas sector too will be in focus, as the CEA has said that rising global oil prices will not pose a serious risk to the economy if they remain within the range of $55-65 a barrel.


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



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  • Bharti Airtel through its subsidiary - Bharti Airtel Services, has acquired a strategic equity stake in Seynse Technologies.
  • ITC is planning to increase prices of its leading cigarette brands, India Kings, Classic and Gold Flake, by around 11 to 13%.
  • HDFC Bank has unveiled 'Secure Banking' programme at Jammu to educate customers and create awareness among public.
  • Tata Steel has achieved milestone of 2MT of hot metal production from its new plant located in Kalinganagar Industrial Complex in Jajpur district of Odisha.
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