Indian equity markets jumped high
on Wednesday's trading session to settle higher, in tandem with the global
peers. After a firm start, markets remained bullish throughout the day, aided
with Finance Minister Nirmala Sitharaman's statement that the economy is not in
trouble and green shoots are visible with the country moving towards a $5 trillion
economy. Traders remained optimistic, amid the Reserve Bank of India's (RBI)
latest report outward Foreign Direct Investment (OFDI) showing that investments
by Indian firms in foreign countries rose by 42.85 percent to $2.10 billion in
January 2020 as compared to $1.47 billion in the same month a year ago. Markets
maintained their strong gains in the second half of the trading session, after
Minister of State for Finance Anurag Singh Thakur said that the Centre has
released Rs 81,043 crore as GST compensation to states for April-September
2019. He also said that GST compensation cess collection has shown upward trend
since October 2019. Markets participants got relief, with principal economic
adviser at the finance ministry Sanjeev Sanyal's statement that Indian economic
growth is poised to bounce back after slipping to a more than six-year low of
4.5% in the July-September quarter as the government has taken measures to prop
up investments and consumer demand. Finally, the BSE Sensex gained 349.76 points
or 0.85% to 41,565.90, while the CNX Nifty was up by 93.30 points or 0.77% to
12,201.20.
The US markets ended higher on
Wednesday, with all three major benchmarks registering all-time closing highs,
buoyed by signs of a slowdown in the number of new cases of COVID-19 -a strain
of coronavirus that emerged in Wuhan, China late last year. China's National
Health Commission on Wednesday said 2,015 new cases of the disease caused by
the new viral infection had been reported over the last 24 hours, declining for
a second day. That brought the number of cases in mainland China to 44,653,
although experts have warned that a substantial number may have gone uncounted.
The commission said there were 97 additional deaths from the virus in the last
24 hours, bringing the mainland total to 1,113. Traders also kept an eye on
Federal Reserve Chairman Jerome Powell's testimony before the Senate Banking
Committee. Powell's prepared remarks mirrored those he delivered before the
House Financial Services Committee on Tuesday. In his prepared remarks, Powell
said the Fed is closely monitoring the coronavirus outbreak but also
highlighted the resilience of the US economy.
Crude oil futures ended sharply
higher on Wednesday amid expectations that the Organization of the Petroleum
Exporting Countries (OPEC) and allies will significantly cut crude production,
and on reports from China that the number of new infections due to the
coronavirus has come down a bit. However, US government showed a third straight
weekly rise in crude inventories that was bigger than market expectations.
According to the data released by the Energy Information Administration (EIA),
crude stockpiles in the US were up by 7.5 million barrels in the week ended
February 7. The American Petroleum Institute on Tuesday reported a rise of 6
million barrels. Crude oil futures for March rose $1.23 or 2.5 percent to
settle at $51.17 a barrel on the New York Mercantile Exchange. April Brent
surged $1.78 or 3.3 percent to settle at $55.79 a barrel on London's Intercontinental
Exchange.
Indian
rupee depreciated for second straight session against the US dollar on
Wednesday, due to increased demand of the greenback from the importers and the
banks. Traders remained on sidelines ahead of the release of Consumer Price
index (CPI) for January and Index of Industrial Production (IIP) data for
December later in the day. Moreover, dollar's strength against major global
currencies overseas affected the rupee. However, losses remain capped as some
optimism came with principal economic adviser at the finance ministry Sanjeev
Sanyal's statement that Indian economic growth is poised to bounce back after
slipping to a more than six-year low of 4.5% in the July-September quarter as
the government has taken measures to prop up investments and consumer demand.
On the global front, dollar held near a four-month high on Wednesday amid hopes
the spread of the coronavirus had slowed, with the New Zealand dollar gaining
after the central bank dropped a bias towards lowering interest rates. The last
traded price of rupee was 71.34, 7 paise weaker from its previous close of
71.27 on Tuesday.
The
FIIs as per Wednesday's data were net buyers in both equity and debt segments.
In equity segment, the gross buying was of Rs 7201.64 crore against gross
selling of Rs 5044.21 crore, while in the debt segment, the gross purchase was
of Rs 1506.69 crore with gross sales of Rs 1417.67 crore. Besides, in the
hybrid segment, the gross buying was of Rs 3.64 crore against gross selling of Rs
0.04 crore.
The US markets ended higher on
Wednesday as investors concern over the coronavirus receded amid hopes the rate
of infections is slowing. Asian markets are trading mostly higher in early
deals on Thursday following the positive cues from Wall Street. Indian equity
markets ended higher for second straight day on Wednesday led by FMCG, bank
stocks. Today, the markets are likely to
make pessimistic start and traders will be negatively reacting to the economic
data announced after the market hours yesterday. India's retail inflation based
on Consumer Price Index (CPI) spiked to 7.59 per cent for the month of January
2020 from 7.35 per cent in December 2019, due to costlier food products like
vegetables, pulses and protein-rich items. Inflation in January is well above
the Reserve Bank of India's (RBI) medium-term target of 4 per cent for the
fourth straight month. Meanwhile, Industrial production contracted by 0.3 per
cent in December 2019 as against 2.5 per cent growth in same month a year ago,
weighed by a decline in the manufacturing sector. The IIP growth during
April-December period of the current fiscal decelerated to 0.5 per cent from
4.7 per cent expansion in the same period of 2018-19. However, some respite may
come later in the day with Chief Economic Advisor Krishnamurthy Subramanian's
statement that the coronavirus outbreak in China provides an opportunity for
India to expand exports. India is one of China's leading trade partners in Asia
and has a huge trade deficit with that country. He said China imports a lot of
components, parts, assembles and integrates and then exports them. India has
been following the same pattern in terms of mobile manufacturing in the
country. So, if one looks from this perspective, it provides a good opportunity
for India. Meanwhile, Union Minister Nitin Gadkari has said that the government
is targeting khadi and village industries to boost job creation in the rural
and tribal areas and improve purchasing power of people. He said 'our focus is
on village industries including honey, kulhads, bamboo, fishing, bio-fuels
towards employment generation in the agriculture, rural and tribal sectors and
to enhance their purchasing power through favourable policies.' There will be
some buzz in the insurance stocks as the Cabinet approved the proposal for
capital infusion and immediate release of Rs 2,500 crore for three public
sector general insurance companies in the light of the critical financial
position and breach of regulatory solvency requirements.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE Nifty
|
12,201.20
|
12,153.08
|
12,240.53
|
BSE Sensex
|
41,565.90
|
41,373.88
|
41,714.89
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,013.73
|
35.20
|
34.58
|
36.28
|
SBI
|
389.31
|
320.20
|
316.33
|
326.98
|
Tata Motors
|
346.21
|
170.95
|
168.87
|
173.17
|
Coal India
|
146.69
|
180.30
|
177.87
|
183.07
|
GAIL
|
146.68
|
130.35
|
128.23
|
131.73
|
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