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NSE Intra-day chart (27 February 2017)
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Market Commentary 28 February 2017
Markets to get a cautious start ahead of GDP data

Indian benchmark indices snapped its 6-day winning streak on Monday as market participants remained cautious ahead of the US president Donald Trump's speech to a joint session of Congress on Tuesday night. On the domestic front, sentiments were undermined by the report that economic think tank National Council of Applied Economic Research (NCAER) has lowered the country's growth forecast to 6.9% for the current fiscal on account of demonetization. According to NCAER, the growth rate would rebound to 7.3% for 2017-18. Recently, IMF lowered GDP growth forecast to 6.6% due to the strains that have emerged in the economy as a result of ‘temporary disruptions' caused by demonetisation. Furthermore, Investors turned jittery with a private survey stating that the full impact of the government's decision to demonetise high denomination currency in November is likely to show up in the December quarter's GDP growth number that comes out Tuesday. It expects the GDP growth for the quarter ended December 31, to be in the range of 5.5 to 6.5 percent. However, the downside remained capped by gains in index heavyweight Reliance Industries, which surged to eigth-year high on continued hopes about its telecom unit Reliance Jio. In past four trading sessions, the stock jumped 17% from Rs 1,074 on February 20, after Reliance Jio Infocomm (RJio), a subsidiary of RIL, announced that its tariff plans will become applicable from April 1, 2017. Some support also came with the report that Foreign Direct Investment (FDI) in India grew 18% during 2016 to touch $46 billion. The main sectors, which attracted the highest foreign inflows, include services, telecom, trading, computer hardware & software and automobile. Finally, the BSE Sensex declined 80.09 points or 0.28% to 28812.88, while the CNX Nifty was down by 42.80 points or 0.48% to 8,896.70. 


The US markets closed higher on Monday, with the Dow industrials posting a 12th straight record close as investors await a speech Tuesday night by President Donald Trump, in which he is expected to touch on plans for overhauling the tax code and health-care system. On the economy front, business investment got off to a poor start in 2017 aside from the aerospace industry, perhaps a sign business are awaiting new policies by the Trump administration before acting. Orders for durable goods climbed 1.8% in January, but the gain was due entirely to a spike in contracts for commercial jets and military planes. The increase in January was fueled by a 70% jump in orders for passenger planes and a 60% advance in bookings for fighter jets and related military goods. Orders for new cars and trucks also edged up by 0.2%. Meanwhile, shipments of core capital goods, a category used to help determine gross domestic product, fell a somewhat steeper 0.6% in January. Meanwhile, a gauge of pending home sales slumped in January as the market succumbed to inventory that's too low to satisfy demand. The National Association of Realtors' index fell 2.8% to 106.4, the lowest since last January. The Dow Jones Industrial Average added 15.68 points or 0.08 percent to 20,837.44, Nasdaq was up 16.59 points or 0.28 percent to 5,861.90, while S&P 500 gained 2.41 points or 0.10 percent to 2,369.75. 


Crude oil futures managed a positive close on Monday, despite concerns that faster growth in U.S. oil production may cap further upside momentum in oil prices. Traders were concerned with a report from energy provider Genscape showing a build of more than 800,000 barrels of crude at the cushing storage hub in Oklahoma, which added to concerns that US crude production may curtail many producers' efforts to drain excess supply in the industry. OPEC is trying to end the global supply glut while U.S. producers are ramping up, leaving prices in a relatively tight trading range between $50-55 a barrel. Benchmark crude oil futures for April delivery gained $0.06 or 0.13 percent to $54.05 on the New York Mercantile Exchange. In London, Brent crude for April delivery ended higher by $0.13 at $56.44 on the ICE.


Continuing its uptrend for the second straight session, Indian rupee ended stronger against dollar on Monday due to sustained selling of the US currency by exporters and banks. Sentiments remained up-beat with the Finance Minister Arun Jaitley's statement that the demonetisation process is almost complete and it has been the smoothest possible replacement of currency anywhere in the world. Some support also came with report that Foreign Direct Investment (FDI) in India grew 18% during 2016 to touch $46 billion. Besides, the dollar weakness against some currencies overseas supported the rupee but weak trade in the local equity market capped some gains. On the global front, dollar slipped against yen on Monday, as investors looked ahead to U.S. President Donald Trump's speech to Congress this week for details of promised tax cuts and infrastructure spending. Finally, the rupee ended at 66.70, 12 paise stronger from its previous close of 66.82 on Thursday.


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 9747.78 crore against gross selling of Rs 9059.76 crore, while in the debt segment, the gross purchase was of Rs 696.74 crore with gross sales of Rs 674.06 crore.


The US markets coming off their initial weakness posted modest gains in last session, with the Dow and the S&P 500 once again climbing to new record closing highs, amid optimism about pro-business policies under President Donald Trump. The Asian markets have made a mixed start again with some indices trading marginally in red, though the Japanese market was trading higher on receiving support from a drop in the yen overnight, with the dollar maintaining gains ahead of Donald Trump's address to Congress. The Indian markets snapped their gaining streak in last session and ended with a quarter percent of losses. Today, the start is likely to remain cautious and the traders will be deriving some cues from the US President's speech. On the domestic front, all eyes will be on the revised advance estimate for GDP growth in 2016-17. The Central Statistics Office (CSO) is slated to come up with its second official estimate of gross domestic product (GDP) growth later in the day for the financial year 2016/17 after factoring in demonetisation impact in the December quarter. The first advance estimates of National Income, 2016/17 pegged the GDP at growth at 7.1 per cent sans demonetization impact. The CSO is also slated to release the numbers for the third quarter which witnessed cash crunch following demonetization move. Meanwhile, traders will be getting some support in early deals with Finance Minister Arun Jaitley's statement that India has potential to grow faster and plans are underway to reduce poverty and create jobs in rural areas. He also expressed his hopes that the GST would be implemented by July 1. Banking stocks will be in focus, as an umbrella body of nine bank unions has called a day-long strike to protest the government's "anti-people banking reforms".



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



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Bharti Airtel






  • Larsen & Toubro's- wholly owned subsidiary - L&T Hydrocarbon Engineering has bagged an onshore EPC contract from Indian Oil Corporation worth around Rs 1,100 crore.
  • Northern Coalfields, a subsidiary of Coal India has received its board's approval for buyback of shares.  
  • Maruti Suzuki India has stopped selling one of its popular hatchbacks 'Ritz' in both domestic and international markets.
  • Bajaj Auto has unveiled the souped up version of its Duke range- the 390 Duke, 250 Duke and 200 Duke.
News Analysis