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NSE Intra-day chart (25 February 2019)
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Market Commentary 26 February 2019
Markets to make a negative start amid lackluster cues from Asian peers


Indian equity benchmarks were on the mend on the first day of the trading week, with both the larger peers closing higher by over 340 and 80 points, respectively. The market made a firm start, amid reports that the Goods and Services Tax (GST) Council, headed by Union Finance Minister Arun Jaitely, cut tax rate on under-construction housing properties to 5 per cent without input tax credit (ITC), from the existing 12 per cent. This step has been came a big relief to home buyers. Adding optimism among the market participants, Commerce and industry minister Suresh Prabhu said that the government is making a strategy to make India a $5 trillion economy and simultaneously fine tuning the plan to take it to $10 trillion. Traders overlooked Financial Services Secretary Rajiv Kumar's statement that ensuring intermediation by financial institutions like banks and NBFCs in a clean manner is one of the major challenges faced by the Indian banking sector. He added that making credit rating agencies more accountable is also another challenge. In the second half of the session, the markets rallied further to settle near day's high points, supported by firm opening of European markets. Domestic sentiments got boost as the Government is launching the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), to provide an assured income support to the small and marginal farmers. Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs 6,000 per year. Traders also took encouragement with report that the Central Board of Indirect Taxes and Customs (CBIC) constituted three Working Groups to study and recommend measures to facilitate trade, promote exports and improve compliance. The Working Groups will focus on improving the legislative structure of customs tariff and update it to suit the emerging and future needs of the economy and industry. Special focus would be given to create a comprehensive export tariff structure to enhance India's export competitiveness. Finally, the BSE Sensex gained 341.90 points or 0.95% to 36,213.38, while the CNX Nifty was up by 88.45 points or 0.82% to 10,880.10.


The US markets ended higher on Monday after President Donald Trump announced he intends to postpone a planned increase in US tariffs on Chinese imports. He had previously threatened to raise tariffs on $200 billion worth of Chinese goods to 25% from 10% if a long-term trade agreement was not reached before a March 1 deadline. The increase in tariffs will now be delayed, although Trump did not specify another deadline to strike a trade deal. He said the decision to delay the tariff increase reflected substantial progress in the ongoing trade talks between the US and China. The president said the US and China have made progress on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. On the economic front, delayed data released by the Commerce Department showed wholesale inventories in the US jumped by much more than anticipated in the month of December. The report said wholesale inventories surged up by 1.1% in December after climbing by an upwardly revised 0.4% in November. The bigger than expected jump in wholesale inventories came as inventories of durable goods spiked by 1.5% in December after rising by 0.7% in November. Inventories of metals, furniture, electrical equipment, and lumber all showed significant increases during the month. The report said inventories of non-durable goods also rose by 0.3% in December after edging down by 0.1% in November. Dow Jones Industrial Average surged 60.14 points or 0.23 percent to 26091.95, Nasdaq gained 26.92 points or 0.36 percent to 7554.46 and S&P 500 was up by 3.44 points or 0.12 percent to 2796.11.


Crude oil futures settled lower on Monday as President Donald Trump blamed the Organization of the Petroleum Exporting Countries (OPEC) for a recent resurgence in prices, calling for moderation. Trump revived his criticism of the OPEC, as oil's price has been on a tear in recent weeks. Meanwhile, the OPEC said that they were planning to back a continuation of oil-production curbs when the group meets in April. Benchmark crude oil futures for April dropped $1.78 or 3.1 percent to settle at $55.48 a barrel on the New York Mercantile Exchange. April Brent crude fell 2.36 or 3.5 percent to settle at $64.76 a barrel on London's Intercontinental Exchange.


Indian rupee ended stronger against dollar on Monday, owing to dollar sale by exporters and banks. This was the second day of consecutive gains for the domestic currency. Sentiments remained up-beat with Commerce and industry minister Suresh Prabhu's statement that the government is making a strategy to make India a $5 trillion economy and simultaneously fine tuning the plan to take it to $10 trillion. Besides, weakness in the dollar against some other currencies overseas along with good going in the local equity markets gave the uptrend some momentum. On the global front, pound strengthened against its major counterparts on Monday, following a media report that U.K. Prime Minister Theresa May is mulling a plan to postpone the Brexit for up to two months. Finally, the rupee ended at 70.97, 17 paise stronger from its previous close of 71.14 on Friday.


The FIIs as per Monday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 16452.10 crore against gross selling of Rs 4320.00 crore, while in the debt segment, the gross purchase was of Rs 812.07 crore with gross sales of Rs 1631.05 crore. Besides, in the hybrid segment, the gross buying was of Rs 865.59 crore against gross selling of Rs 0.94 crore.


The US markets ended in green on Monday, after President Trump said he would delay a planned increase in tariffs on Chinese goods. Asian markets are trading mixed on Tuesday with several markets slipping as the rush of optimism on US-China trade talks from early Monday faded some. Indian markets ended sharply higher on Monday buoyed by a rally in IT bluechips. Besides, firm global as well as domestic cues also supported markets. Today, the markets are likely to make pessimistic start amid lackluster cues from Asian peers. Traders will be concerned about a report that the flow of foreign direct investment (FDI) into India is dropping and may suffer its first full-year decline since Prime Minister Narendra Modi came to power in 2014. Inbound FDI dropped 7% to $33.5 billion in the nine months between April and December 2018, compared with $36 billion in the year-earlier period. There will be some cautiousness with Bibek Debroy, the head of Prime Minister's economic advisory panel, stating that India lacks good data on economy and jobs as it is majorly an informal economy. Also, there will be negative reaction on domestic ratings agency Icra's report that India Inc witnessed a dip in both revenue growth as well as margins in the December quarter compared to the preceding three months. The analysis is based on the aggregate numbers reported by 648 listed companies, which shows a revenue growth of 17.3% in Q3 down from 19.4% in the preceding three months. However, traders may take some support later in the day with SBI Research's report saying that the economy is likely to grow at 6.6-6.7% in the third quarter and 7.2% for the full financial year. The yearly SBI composite index for February saw a marginally rise to 50.60 (a score of under 50 indicates negative growth). Traders may take note of NITI Aayog CEO Amitabh Kant's statement that upliftment of over 100 aspirational districts can propel India to achieve a growth rate of 9-10% for up to 30 years as it is imperative to have equity for growth to sustain. There will be some buzz in the reality sector stocks with CRISIL Research's report that even as the latest GST cut on under-construction housing projects is expected to increase demand, real estate developers may see mixed results. It added that the withdrawal of input tax credit (ITC) would impact the profitability of developers. there will be some reaction in sugar sector stocks with India Ratings' report that even as there is lower sugar production due to deficient rainfall in sugar season (SS) 2018-19, surplus situation continued following high carry-over stock from the last season.


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  • NTPC's subsidiary -- BRBCL has commenced commercial operation of Unit number 3 of 250 MW of Nabinagar Thermal Power Project with effect from February 20, 2019. 
  • M&M has launched a technology-based electric mobility service in Mumbai on select routes.
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