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NSE Intra-day chart (04 February 2021)
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Market Commentary 05 February 2021
Markets to get positive start ahead of RBI's policy outcome


Indian equity benchmarks continued the winning streak on the fourth straight session and settled at record closing high on Thursday, led by advances in Power, FMCG, Metal and Banking stocks. Initially, weak global cues led to a muted start in the benchmarks. Some concern also came with rating agency Moody's statement that India's fiscal deficit projections are higher than expected and slower consolidation will constrain its fiscal strength over the medium term. It also expects India's nominal GDP growth to rise to closer to 17 percent in fiscal 2021, higher than 14.4 percent projected in the Budget. However, the markets turned positive from weak start and traded near lifetime highs following a recovery in banking stocks. Sentiments remained up-beat as the Corporate Affairs Ministry has revised the definition of small companies under the Companies Act by increasing their thresholds for paid-up capital from 'not exceeding Rs 50 lakh' to 'not exceeding Rs two crore' and turnover from 'not exceeding Rs two crore' to 'not exceeding Rs 20 crore'. A Ministry release said the step, in line with the government's vision, is expected to benefit more than two lakh companies in terms of lesser compliances, lesser filing fees and lesser penalties in the event of any defaults. Additional support also came as the Finance Ministry has released the 14th installment of Rs 6,000 crore to states to meet the GST compensation shortfall, taking the total amount of fund released so far to Rs 84,000 crore. Till now, 76 per cent of the total estimated GST compensation shortfall has been released to states and 3 UTs. Out of this, an amount of Rs 76,616.16 crore has been released to 23 states and Rs 7,383.84 crore to the 3 UTs with Legislative Assembly (Delhi, J&K, Puducherry). Finally, the BSE Sensex rose 358.54 points or 0.71% to 50,614.29, while the CNX Nifty was up by 105.70 points or 0.71% to 14,895.65.


The US markets settled higher with gains of over one percent on Thursday. The Nasdaq and the S&P 500 ended the session at new record closing highs. The markets continued to benefit from the upward momentum seen on Monday and Tuesday, which helped stocks largely offset the steep losses posted last week. Easing concerns about speculative trading have helped drive the markets higher along with mostly upbeat earnings news from big-name companies. Positive sentiment was also generated in reaction to a report from the Labor Department showing a continued decline in first-time claims for US unemployment benefits in the week ended January 30th. The report said initial jobless claims fell to 779,000, a decrease of 33,000 from the previous week's revised level of 812,000. Street had expected jobless claims to edge down to 830,000 from the 847,000 originally reported for the previous week. Jobless claims dropped for the third straight week, falling to their lowest level since hitting 716,000 in the week ended November 28th. Meanwhile, new orders for US manufactured goods showed another significant increase in the month of December, according to a report released by the Commerce Department. The report said factory orders jumped by 1.1 percent in December after surging up by 1.3 percent for three consecutive months. Street had expected factory orders to climb by 0.7 percent. The bigger than expected increase in factory orders came as orders for non-durable goods spiked by 1.7 percent, while orders for durable goods rose by an upwardly revised 0.5 percent.


Crude oil futures settled higher for fourth straight session on Thursday, on continued optimism that crude oil supplies will drop thanks to OPEC and its allies' commitment to reduce output to stabilize the oil market. OPEC and its allies, known as OPEC+, extended their current oil output policy at a meeting on Wednesday. Amid uncertain prospects for the global economy, there wasn't any recommendation about changing the production levels of the alliance. Ministers led by Saudi Arabia and Russia struck a note of cautious optimism about global oil markets and stressed the importance of accelerating market re-balancing without delay. Crude oil futures for March rose $0.54 or 1 percent to settle at $ 56.23 barrel on the New York Mercantile Exchange. April Brent crude gained $ 0.12 or 0.2 percent to settle at $ 58.81 a barrel on London's Intercontinental Exchange.


Indian rupee ended flat on Thursday due to mild dollar demand from banks and importers. Traders took note of report that Minister of State for Commerce and Industry Som Parkash informed the Lok Sabha that in the last six financial years (2014-20), India has received FDI inflow worth $358.30 billion which is 53 per cent of the FDI reported in the last 20 years ($681.87 billion). Meanwhile, rating agency Moody's stated that India's fiscal deficit projections are higher than expected and slower consolidation will constrain its fiscal strength over the medium term. It also expects India's nominal GDP growth to rise to closer to 17 percent in fiscal 2021, higher than 14.4 percent projected in the Budget. On the global front, pound fell to its weakest in two and a half weeks against the dollar on Thursday before a Bank of England meeting on caution about the possibility of negative rates. Finally, the rupee ended unchanged from its previous close of 72.96 on Wednesday.


The FIIs as per Thursday's data were net buyer in both equity and debt segment. In equity segment, the gross buying was of Rs 11553.18 crore against gross selling of Rs 8871.89 crore, while in the debt segment, the gross purchase was of Rs 1141.83 crore with gross sales of Rs 1077.32 crore. Besides, in the hybrid segment, the gross buying was of Rs 17.61 crore against gross selling of Rs 33.54 crore.


The US markets ended significantly higher on Thursday as investors looked to corporate earnings and signs of progress on a pandemic-relief package after data suggested the labor market was stabilizing. Asian markets are trading in green on Friday after overnight gains stateside that saw the S&P 500 hitting a record closing high. Indian markets ended at record high levels on Thursday, extending their gaining streak for the fourth consecutive session, led by a surge banking, metals, and FMCG stocks. Today, the markets are likely to open higher ahead of the Reserve Bank of India's (RBI) monetary policy outcome amid positive global cues. There are expectations that the RBI's rate-setting Monetary Policy Committee (MPC) is likely to hold interest rates and continue with accommodative policy stance so that necessary monetary action could be taken to push growth. This is the first MPC meeting after the presentation of the Union Budget 2021-22. The MPC kept the key benchmark rate unchanged in its last three reviews. Some support will come as Finance Minister Nirmala Sitharaman exuded confidence that the disinvestment calendar announced in the Union Budget will work well. She added the government is confident that revenue generation will improve through this year and it will be bringing in non-tax revenue other than just disinvestments through various routes, including monetisation of assets. Traders may take note of report that the IMF has welcomed India's Union Budget for focusing on growth and said fiscal policy can and should play an important role in facilitating a strong and inclusive economic recovery. However, investors may be concerned with report that India recorded 12,410 fresh Covid-19 cases of the coronavirus disease (Covid-19). There may be some cautiousness with a private report that exporters are concerned about the proposed amendments in the integrated goods and services tax (IGST) in the Finance Bill that have taken away the flexibility of exporting on the payment of the integrated tax. Oil & gas and oil marketing companies stocks will be in limelight as petrol and diesel prices climbed to fresh highs in the country as rates were hiked by the most in recent times, even as fuel retailers said the government can cut taxes to ease consumer burden. Broadcasting & Cable TV industry stocks will be in focus after Telecom regulator TRAI issued its recommendations on the back reference from the Ministry of Information and Broadcasting on the authority's earlier guidelines on the regulatory framework for platform services offered by DTH. TRAI recommended that programmes transmitted by the DTH operators or MSOs or IPTV operators as a platform service shall be exclusive and the same shall not be permitted to be shared directly or indirectly with any other DPO. Meanwhile, Stove Kraft shares will make their share market debut on Friday.


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



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  • HCL Technologies has entered into a global strategic alliance with Alteryx to help companies across the globe succeed in their analytics automation and digital transformation priorities. 
  • Reliance Industries' wholly owned subsidiary-- RMLLC has signed agreements to divest all of its interest in certain upstream assets in the Marcellus shale play of south-western Pennsylvania. 
  • Hero MotoCorp has set up a separate vertical to drive its new business of Harley-Davidson products and merchandise distribution in the country.
  • Titan has launched Edge Mechanical, the slimmest mechanical watch by an Indian watchmaker.
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