NSE Intra-day chart (07 March 2018)
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Market Commentary 08 March 2018

                                                                     

Bears took full control on Dalal Street with frontline gauges ending Wednesday's trade with a cut of around a percent, breaching their crucial 10,200 (Nifty) and 33,100 (Sensex) levels, as growing fears over the PNB scam and continued selling pressure from FIIs on expectations of faster than anticipated interest rate hike in the US kept the underlying sentiments cautious. After a cautious start, markets extended their downfall to end near intraday lows as sentiments turned pessimistic with a private report that private equity and venture capital investments in February registered a sharp 60% month-on-month decline to $1.4 billion across 63 deals, due to the absence of any mega deals. As per the report, no major deals above the value of $300 million happened last month, causing the decline from January, which registered deals worth $3.5 billion. Separately, following the new norms on stressed assets issued by the RBI last month, power companies fear that two-thirds of private thermal power capacity is at high risk of being declared as non-performing assets (NPA). Severe impact is expected on 51,000-Mw existing power generation capacity set up with investments of more than Rs 4 lakh crore, and another 28,000-Mw plants are under construction. Traders failed to get any sense of relief with report that the government is planning to pitch for an upgrade in its sovereign ratings from global rating agency Fitch, highlighting its structural reform initiatives and a revised fiscal consolidation framework. Officials from the Finance Ministry are scheduled to meet representatives from Fitch Ratings on March 7 as part of the annual review by the agency. Traders failed to get any solace with private report that the Indian economy is likely to recover gradually to 7.1% in the 2018-19 financial year, as GST-related disruptions have eased and consumption levels have improved. Finally, the BSE Sensex declined 284.11 points or 0.85% to 33,033.09, while the CNX Nifty was down by 95.05 points or 0.93% to 10,154.20.

 

The US markets closed mostly lower on Wednesday, with the S&P 500 index and the Dow Jones Industrial Average closed lower as the resignation of top White House economic adviser Gary Cohn stoked fears of a trade war but the tech-laden Nasdaq bucked the trend to extend its winning streak to a fourth session. Concerns about the prospect of a global trade war, prompted by Trump's plan to introduce tariffs on steel and aluminum imports, intensified as Cohn had opposed the tariff proposal and was widely viewed as having a moderating influence within the White House. Still, some of the selling pressure eased following the release of the Federal Reserve's beige book, which emphasized modest economic growth and moderate inflation, helping the indexes to bounce off intraday lows. On the economy front, the US trade deficit climbed 5% in January and hit a nearly 10-year high, continuing a steady rise since President Trump took over that could exacerbate already tense disputes between the administration and key trading partners. The US trade deficit rose to $56.6 billion in January from $53.9 billion in December. The deficit in January was 16% higher compared with the same month in 2017, when President Trump took office. Exports fell 1.3%, largely reflecting a big drop in the volatile category of commercial aircraft shipments. Exports of oil, chemicals and other industrial supplies also declined. Imports were unchanged at $257.5 billion. The biggest increase in petroleum imports in three years was offset by declines in cellphones, computer chips and other consumer-related goods. The Dow Jones Industrial Average lost 82.76 points or 0.33 percent to 24,801.36, the S&P 500 was down by 1.32 points or 0.05 percent to 2,726.80, while the Nasdaq gained 24.642 points or 0.33 percent to 7,396.65. 

 

Crude oil futures edged lower on Wednesday as concerns surrounding a possible trade war intensified and data revealed a fresh weekly record for domestic crude production. The Energy Information Administration (EIA) reported a second straight weekly climb in U.S. crude inventories, but the size of the climb nearly matched market expectations. The EIA reported a 2.4 million barrel build in crude oil inventories for last week, versus expectations for a 2.7 million barrel build. Also, gasoline inventories declined by 800,000 barrels last week. Also, Crude prices fell amid speculation that U.S. oil production will rise sharply. The U.S. EIA boosted its 2018 and 2019 forecasts on U.S. crude-oil production. Benchmark crude oil futures for April delivery declined $1.45 or 2.3 percent at $61.15 a barrel on the New York Mercantile Exchange. May Brent crude dropped $1.45 or 2.2 percent to settle at $64.34 a barrel on London's Intercontinental Exchange.

 

Rising for the fourth straight day, Indian rupee ended marginally stronger against dollar on Wednesday, owing to dollar sale by exporters and banks. Traders took support with private report enlightening that the Indian economy is likely to recover gradually to 7.1% in the 2018-19 financial year, as GST-related disruptions have eased and consumption levels have improved. The report added that gradual recovery is underway and the country has started to recuperate from the cyclical and structural bottlenecks witnessed over the past two years. The domestic unit also found some support as dollar weakened overseas. However, extremely bearish local equity markets and unabated foreign fund outflows, restricted the further move. On the global front, dollar fell to a two-week intraday low on Wednesday following the resignation of Donald Trump's top economic adviser after he lost his battle against trade tariffs. Finally, the rupee ended at 64.89, 7 paise stronger from its previous close of 64.96 on Tuesday.

 

The FIIs as per Wednesday'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 5929.31 crore against gross selling of Rs 5180.10 crore, while in the debt segment, the gross purchase was of Rs 592.17 crore with gross sales of Rs 771.22 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.10 crore against gross selling of Rs 0.42 crore.

 

The US markets ended mostly in red on Wednesday after White House Press Secretary Sarah Sanders suggested Mexico and Canada could be exempt from President Donald Trump's planned tariffs on steel and aluminum imports. All the Asian markets were trading in green in early deals on Thursday, after market participants digested reports of top White House economic adviser Gary Cohn's resignation. Indian equity indices edged lower for sixth straight session on Wednesday, as authorities widened a probe into Punjab National Bank's $2 billion fraud. Today, the start of the session is likely to be on positive side, as traders might go for value buying after six days of continuous drubbing amid firm trade in regional counterparts. Traders will take some support with Niti Aayog vice chairman Rajiv Kumar's statement that the country's economy, which had witnessed slow growth due to decline in private investment and other factors, is on the rise again. He added that the employment should get due attention and that job creation would contribute to GDP growth as well. Some support will also come from report that the Indian government reiterated its pitch for a sovereign rating upgrade to Fitch, citing strong macro-economic fundamentals. Fitch has a BBB-, the lowest investment grade sovereign rating on India, with a stable outlook. However, the Congress' victory over the ruling BJP in Rajasthan local body polls and the Telugu Desam Party's decision to pull out two of its ministers in the central government may serve to keep underlying sentiment somewhat cautious. Stocks related to telecom space will be buzzing on report that The Union Cabinet has relaxed spectrum holding caps, giving a boost to M&As and spectrum sale, as carriers try to sell assets, including airwaves, to repay debt. The Cabinet also extended the payments tenure for auctioned airwaves from 12 years. Shares of consumer goods firms could be in focus after the Union Cabinet hiked dearness allowance to Central Government employees.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10,154.20

10,116.05

10,217.85

BSE Sensex

33,033.09

32,905.75

33,245.82

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ICICI Bank

314.73

286.70

283.43

291.88

SBI

312.63

246.65

243.35

252.65

Tata Motors

155.99

347.80

342.27

354.32

ITC 

151.53

259.90

255.47

262.42

Hindalco Industries

139.60

224.45

220.60

226.80

 

  • TCS and Virgin Atlantic have extended their strategic partnership for a further five years. 
  • Infosys has inaugurated its flagship Technology and Innovation Hub in Indianapolis. 
  • Bharti Airtel and GBI have entered into a strategic agreement to unlock the capacity on GBI's India-Middle East-Europe submarine cable system. 
  • Hero MotoCorp has introduced the new -- Super Splendor -- across markets in the country.
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