Snapping seven days of losing
streak, Indian equity benchmarks ended the session with a gain of around a
percentage point, with frontline gauges recapturing their crucial 34,400
(Sensex) and 10,550 (Nifty) levels, as traders opted to buy beaten down but fundamentally
strong stocks after seven sessions of continuous drubbing. After opening mildly
in green markets gained momentum, as traders also took some encouragement with
ASSOCHAM chief's statement that the Reserve Bank of India's (RBI's) decision to
keep the policy rate unchanged is on the expected lines, though the less than
hawkish stance has come about as a relief for the industry which had even
feared a possible hike in the lending rates, following inflationary concerns. A
sharp fall in oil prices also eased investors' concerns surrounding inflation
and rising twin deficits. The EIA's Short-Term Energy Outlook predicted that US
oil production would top 11 million barrels per day this year. Sentiments also
got boost by a report that India's oil refining capacity is set to jump 80%, or
by 194 MT, by 2030 as state refiners, Reliance Industries and Rosneft line up
expansion plans, undeterred by the renewables explosion, hoping to meet future
demand. Traders also got some support with report that the CBDT has directed
the taxman not to undertake ‘coercive' steps in recovering pending taxes from
startups under a specific provision of the Income Tax Act, a move aimed to help
budding entrepreneurs in the country. Meanwhile, Moody's said that the global
green bond issuances are likely to surge by 60 per cent to a record $250
billion this year, with India and China leading the emerging markets in this
space. However, markets pared some of their gains in last leg of trade, as
anxiety spread among the traders with the exporters' body, Federation of Indian
Export Organisations' (FIEO) statement that liquidity problems emanating from
delay in refund of Goods and Services Tax (GST) is forcing exporters to turn
down new orders. It also noted that micro, small and medium enterprises (MSMEs)
are cutting their workforce due to cash crunch. Finally, the BSE Sensex surged
330.45 points or 0.97% to 34,413.16, while the CNX Nifty was up by 100.15
points or 0.96% to 10,576.85.
The US markets closed lower on
Thursday, as stocks went into a free fall late in the session on concerns about
mounting volatility and worries about inflation and rising bond yields. While
inflation concerns and rising rates are often described as the catalyst for the
selloff, the street have also noted that equities were due for a pullback after
scoring big gains in January and throughout 2017. Separately, political worries
might pressure the market somewhat, as a partial shutdown of the federal
government lies ahead if lawmakers don't agree on spending measures by
midnight. Senate Majority Leader Mitch McConnell and Senate Minority Leader
Chuck Schumer unveiled an agreement. The deal faces a bumpy path in the House,
where Republicans will need Democrats' help to pass it, since conservatives
will likely object to a big increase in government spending. On the economy
front, initial US jobless claims fell by 9,000 to 221,000 in the seven days
ended February 3. The more stable monthly average of claims declined by 10,000
and stood at 224,500. The number of people already collecting unemployment
benefits, known as continuing claims, dropped by 33,000 to 1.92 million.
Missouri, California and New York saw big declines in unadjusted jobless
claims, but in most states there was little change. US jobless claims have now
been under the key 300,000 threshold that signals a vibrant labor market for
153 straight weeks. And there is no evidence at all that claims are about to
head higher. The Dow Jones Industrial Average slipped 1,032.89 points or 4.15
percent to 23,860.46, the Nasdaq dropped 274.825 points or 3.9 percent to
6,777.16, the S&P 500 edged lower by 100.66 points or 3.75 percent to 2,581.00.
Extending their southward journey
for yet another day, Crude oil futures slipped to their lowest in five weeks
due to a stronger dollar and demand concerns. Rising U.S. stockpiles also
contributed to the recent decline in oil prices, which have fallen from 4-year
highs in the past few weeks. U.S. commercial crude oil inventories (excluding
those in the Strategic Petroleum Reserve) increased by 1.9 million barrels from
the previous week. Total motor gasoline inventories increased by 3.4 million
barrels last week, and are in the middle of the average range. Moreover,
Organization of the Petroleum Exporting Countries (OPEC) and Russia may extend
their supply quota deal into 2019. Benchmark crude oil futures declined 64
cents or 1 percent, at $61.15 a barrel on the New York Mercantile Exchange.
Brent crude lost 0.6 percent, to $64.41 a barrel on London's Intercontinental
Exchange.
Indian
rupee wiped off its early losses and ended a tad strong against dollar on
Thursday, owing to sustained selling of the US currency by exporters and banks.
Local currency got support with report that a sharp fall in oil prices eased
investors' concerns surrounding inflation and rising twin deficits. Besides,
strong gains in the domestic equity markets also supported the rupee. However,
dollar's strength against major global currencies overseas restricted further
up move. On the global front, dollar marched higher on Thursday, sending a key
index of the US currency to a two-week high. The greenback continued to find
support in optimism over a budget deal in Washington, D.C., and hopes for
higher US interest rates. Finally, the rupee ended at 64.25, 3 paise stronger
from its previous close of 64.28 on Wednesday.
The FIIs as per Thursday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 5897.78 crore against gross selling of Rs 6898.87 crore, while
in the debt segment, the gross purchase was of Rs 490.68 crore with gross sales
of 900.99 crore. Besides, in the hybrid segment, the gross buying was of Rs
0.14 crore against gross selling of Rs 0.05 core.
U.S. stocks witnessed bloodbath
yet again and settled with a cut of around four percentage points on Thursday,
as traders grew concerned about inflation and higher interest rates. Moreover,
traders shrugged off some upbeat corporate earnings. Asian markets were trading
in deep red, following another day of steep falls on Wall Street. The Japanese
stock market is sharply lower on Friday after the safe-have yen strengthened
again. Indian markets rallied on Thursday as the oil market downturn eased
investors' concerns surrounding inflation and rising twin deficits. Today, the
markets is likely to make gap-down opening, as global equity markets continued
to tumble on worries about rising inflation and higher interest rates. Back on
domestic turf, traders may get some relief later in the day with private report
that fears of the Reserve Bank of India going for a rate hike are overdone and
there is still room for a 25 bps rate cut in the August monetary policy review,
provided rains are normal. Traders may also take some comfort with Nasscom's
report that outlook for the Indian information technology (IT) sector is
cautiously positive in 2018 as challenges remain amidst prospects of greater IT
spending with global and US economies improving. There will be some buzz in
stocks related to public sector banks (PSBs) with India Ratings and Research
stating that PSBs may need capital of Rs 2.06 trillion for a credit growth of
the 8-9 per cent in the financial year 2019. Telecom stocks will be in focus
after the telecom regulator has sought views on whether airwaves for public
mobile radio trunking (PMRT) service -- used in disaster relief, emergency
response, public safety and some large industries -- should be allocated by the
government or auctioned. Stocks related to sugar space will be in focus after
the central government has put a ceiling on the amount of sugar mills can sell
by imposing significant minimum stocks for the next two months to check falling
prices.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,576.85
|
10,491.67
|
10,649.92
|
BSE Sensex
|
34,413.16
|
34,136.50
|
34,662.09
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
SBI
|
189.33
|
301.40
|
294.87
|
305.62
|
Power Grid
|
188.64
|
193.20
|
192.15
|
194.45
|
Vedanta
|
166.05
|
314.45
|
306.87
|
320.32
|
Sun Pharma
|
137.08
|
584.10
|
549.60
|
602.80
|
Tata Motors
|
124.52
|
374.85
|
371.37
|
379.17
|
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