Indian
equity indices staged a blockbuster performance on the last day of the week by
vehemently rallying close to a two percentage points in the session and recaptured
their important psychological levels. Indian markets posted their biggest
single-day percentage gain since October, as hints of more stimulus measures
from the European Central Bank lifted global markets, but still marked a third
weekly fall. Global markets sentiments improved after oil prices rose 5 per
cent on Friday. Although higher crude prices are not good for India's current
account balance, they are helping shore up risk sentiment in global assets. On
the domestic front, sentiment got a boost after Finance Minister Arun Jaitley
said India is gradually transforming most of its taxation laws for a greater
degree of stability and predictability, stressing that the proposed Goods and
Services Tax (GST) is a major step in this direction. The net impact of the
GST, once it is put into force, is that there will be a seamless transfer of
goods and services across the country. Some support also came with a private
report that India's GDP growth rate is likely to accelerate gradually and
inflation is expected to remain below 5 per cent over the next two years.
Furthermore, adding to the optimism United Nations world economy report said
that the India will be the world's fastest growing large economy at 7.3 per
cent in 2016, improving further to 7.5 per cent in the following year.
Investors overlooked the report that that RBI Governor Raghuram Rajan shot down
Niti Aayog chief Arvind Panagariya's suggestion to raise the central bank's
inflation target, while pointing out that the country's macroeconomic fundamentals
were stable. He said the current global market turbulence may owe much to
central banks persisting with stimulus programmes for too long. On the global
front, Asian markets ended higher after the ECB signaled stimulus hopes. Back
home, the benchmarks got off to a positive start in the morning trade as
investors were largely influenced by the supportive leads from Asian markets.
Thereafter, the frontline indices slowly but steadily started gathering more
steam and surged by around one and half a percent by late morning trades. The
bourses further capitalized on the momentum and spurted in afternoon trades on
the back of broad based bottom fishing in undervalued stocks. Finally, the BSE Sensex surged by 473.45 points or 1.98% to
24435.66, while the CNX Nifty gained 145.65 points or 2% to 7,422.45.
The US markets turned jubilant on
Friday and ended sharply higher, reflecting a return of risk appetite following
the recent weakness for the markets. The day's gains took the indices in green
for the week too for the first time in 2016. Traders drew some comfort with
strength in the overseas markets, as stocks around the world moved sharply
higher and also on optimism about further stimulus from the European Central
Bank after ECB President Mario Draghi said that the bank would review and
possibly reconsider its monetary policy stance at the next meeting in early
March. On economic front, the National Association of Realtors (NAR) reported
that existing home sales rebounded strongly in December after seeing a steep
drop in the previous month. NAR said existing home sales jumped 14.7 percent to
an annual rate of 5.46 million in December from a rate of 4.76 million in
November. Economists had expected sales to climb to a rate of 5.20 million.
However, in a separate report the Conference Board showed a modest decrease by
its index of leading economic indicators in December. The Dow Jones Industrial
Average surged by 210.83 points or 1.33 percent to 16,093.51, the Nasdaq gained
119.12 points or 2.66 percent to 4,591.18 and the S&P 500 ended higher by
37.91 points or 2 percent to 1,906.90.
Crude oil futures surged posting
strongest session of 2016 on Friday, trimming steep recent losses as calm
returned to global markets. Prices gained mainly on bargain hunting and renewed
confidence that central banks will prop up troubled economies. Also, there was
market-moving comments from the head of Saudi Arabia's state-owned oil company
that global oil prices may have hit a bottom. Investors continued to digest
comments from Khalid-al-Falih on the increasing likelihood of further spikes in
crude prices before OPEC convenes next at its semi-annual meeting in June. Benchmark
crude oil futures for March delivery surged by $2.53 or 8.58 percent to $32.19
a barrel after trading in a range of $29.54 and $31.83 a barrel on the New York
Mercantile Exchange. In London, Brent crude for March delivery closed at
$32.05, up $2.80 or 9.57 percent on the ICE.
Snapping
its two-days losing streak, Indian rupee bounced back against dollar on Friday
on heavy dollar selling by banks and exporters, amid hopes that a rebound in
crude oil prices globally may halt outflows from emerging markets (EMs). The
domestic currency looked strong from the very beginning and was supported by
the strong recovery in the local equity market. Sentiments got a boost with RBI
Governor Raghuram Rajan stating that economic reforms in India are in right
direction. Some support also came with a private report that India's GDP growth
rate is likely to accelerate gradually and inflation is expected to remain
below 5 per cent over the next two years. On the global front, the dollar was
firm against a basket of currencies on Friday, as rising expectations of
monetary easing by central banks in Europe offset chances of more rate hikes
from the Federal Reserve. Finally, the rupee ended at 67.63, 40 paise stronger
from its previous close of 68.03 on Thursday.
The
FIIs as per Friday's data were net sellers in equity and in debt segments both.
In equity segment, the gross buying was of Rs 4042.86 crore against gross selling
of Rs 5663.73 crore, while in the debt segment, the gross purchase was of Rs 637.11
crore with gross sales of Rs 803.25 crore.
The US markets ended higher in
last session on increased risk appetite and buying interest, along with rise in
crude prices. All the Asian markets have made a jubilant start, while the
Japanese market has taken the lead, the Chinese shares too opened higher after
first weekly advance in 2016, as bets central banks will come to the rescue of
turbulent financial markets fuelled a rebound in global stocks. The Indian
markets went for a big rally in last session on supportive global cues, today
the start of the holiday truncated F&O expiry week is likely to be a gap-up
one and the markets will extend their rally mood. Traders apart from the solid
start of the regional peers will also be getting some encouragement with global
rating agency Moody's statement that India's credit profile will be unaffected
by a small slippage in fiscal deficit target, as it expects the government to
continue fiscal consolidation and target lower deficits every year despite
headwinds from global slowdown. Also, Finance Minister Arun Jaitley urging private
sector to give up caution and make investments, has said that it has become
absolutely imperative to add to the credibility of the Indian economy, with the
world looking up to the country as a bright spot amid global headwinds.
Meanwhile, industry body Assocham has said that the Indian economy is expected
to improve in six months but private sector investments will be a matter for
concern due to sluggish capacity utilisation and pressure on corporate
earnings. Infra stocks are likely to see some action, as the Finance Minister
has said that India is taking steps to address problems in the infrastructure
sector and multiple institutions are required to meet the funding requirements
in this space. Also there will be lots of result announcements to keep the
markets in action.
Support
and Resistance: NSE Nifty and BSE Sensex
Index
|
Previous close
|
Support
|
Resistance
|
CNX Nifty
|
7422.45
|
7355.57
|
7461.37
|
BSE Sensex
|
24435.66
|
24212.84
|
24565.68
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
Vedanta
|
360.38
|
64.70
|
62.97
|
66.57
|
SBI
|
214.32
|
184.60
|
180.13
|
187.23
|
Idea Cellular
|
168.75
|
106.85
|
102.97
|
113.27
|
Axis Bank
|
150.09
|
424.15
|
416.62
|
429.67
|
ICICI Bank
|
137.71
|
232.75
|
230.07
|
235.17
|
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Larsen & Toubro in consortium with Sojitz Corp, Japan has won a major order worth Rs 1213 crore from the Dedicated Freight Corridor Corporation of India.
ONGC's overseas arm ONGC Videsh has signed a memorandum of understanding with the Republic of Equatorial Guinea to cooperate in the hydrocarbon sector in the African country.
Idea Cellular has reported 3.42% fall in its net profit at Rs 642.65 crore for the quarter ended December 31, 2015 as compared to Rs 665.44 crore for the same quarter in the previous year.
Wipro is building the underlying software for electronics that go into connected cars for 3 out of 4 global manufacturers, as it looks at shifting from traditional services to value-added technology works.