Indian equity
benchmarks moved significantly higher amid heightened volatility on Tuesday,
mainly driven by buying in banking, financial and IT stocks amid positive cues
from global markets. The benchmarks made gap-up opening, as traders got some
support with Finance Minister Nirmala Sitharaman's statement that the fiscal
measures taken by the government have resulted in positive growth of 0.4 per
cent in the third quarter of the current financial year. The minister further
said that the gradual unlocking of the economy has eased supply-side
disruptions enabling inflation to decline from 7.6 per cent in October, 2020 to
4.1 per cent in January 2021, mainly on account of decline in food inflation.
She added that the economy is estimated to contract by 8 per cent during
2020-21 due to the impact of the COVID-19 pandemic. Sentiments remained
positive with Chief Economist of the IMF Gita Gopinath's statement that India
has been at the forefront in fighting the coronavirus pandemic and really
stands out in terms of its vaccine policy. She noted that India has been
providing vaccines through grants to several of its neighbour countries,
including Bangladesh, Nepal and Myanmar, and through commercial arrangements as
well. However, markets gave up gains in afternoon trading, as some concern came
with Fitch Ratings' report stated that the impact of Covid-19 pandemic is
likely to pose challenges to improving financial performance of Indian banks
once asset-quality risks manifest in the financial year ending March 2022
(FY22). The banks reported lower impaired loans and improved profitability for
nine months ended December 2020 due to various forbearance measures and
continued large write-offs. But late buying in private banks and IT shares
helped benchmarks close near the day's highest levels. Traders found support
after Ministry of Finance, Department of Expenditure has released the 19th
weekly installment of Rs 2,104 crore to the States. Out of this, an amount of
Rs 2,103.95 crore has been released to 7 States and an amount of Rs. 0.05 crore
has been released to the Union Territory of Puducherry. Meanwhile, 15th Finance
Commission Chairman NK Singh has called for setting up a Fiscal Council like
institution to better manage the debt trajectory of the Centre and states. He
also highlighted the substantial increase in the proportion of cess and
surcharge in Gross Tax Revenue (GTR) in the past 10 years, saying only if a
Constitutional amendment is introduced to include a portion of it into the
divisible pool, then states' could get a share of the revenue earned under that
head. Finally, the BSE Sensex rose 584.41 points or 1.16% to 51,025.48, while
the CNX Nifty was up by 142.20 points or 0.95% to 15,098.40.
The US markets
settled higher on Tuesday with Nasdaq gaining around 4% to recover from heavy
losses seen in the previous session as US bond yields retreated and investors
scooped up battered technology stocks. The rebound by the Nasdaq came as a
pullback by long-term treasury yields contributed to significant strength among
tech stocks. The yield on the benchmark ten-year note showed a notable move to
the downside after ending the previous session at its highest closing level in
over a year. The subsequent pullback shown by yields inspired traders to pick
up tech stocks at reduced levels despite lingering concerns about inflation and
the outlook for interest rates. Electric car maker Tesla showed a significant
rebound after closing lower for five straight sessions, while tech giants
Facebook, Apple and Amazon (AMZN) also posted strong gains. Semiconductor
stocks turned in some of the market's best performances, with the Philadelphia
Semiconductor Index spiking by 6.1 percent after ending the previous session at
its lowest closing level in over two months. Software, networking and computer
hardware stocks also saw significant strength, contributing to the rally by the
tech-heavy Nasdaq. Outside of the tech sector, gold stocks also moved sharply
higher on the day. The rally by gold stocks came amid a substantial increase by
the price of the precious metal, with gold for April delivery soaring $38.90 to
$1,716.90 an ounce. Retail and brokerage stocks also saw notable strength on
the day, while energy stocks came under pressure amid a steep drop by the price
of crude oil. Meanwhile, investors were awaiting for a Labor Department report
on consumer prices to be out on Wednesday, as concerns about inflation have
contributed to the recent jump in bond yields.
Extending their previous
session's losses, crude oil futures ended lower on Tuesday as traders awaited
weekly crude inventory data for further direction. Oil prices moved higher
earlier in the day as the dollar retreated but failed to hold gains and slipped
into the red as the session progressed. Investors were looking ahead to the
weekly inventory report from the American Petroleum Institute (API). The Energy
Information Administration (EIA) is scheduled to release its weekly oil report
on Wednesday. According to a survey, crude stockpiles may have risen by about
2.7 million barrels in the week ended March 5. Crude oil futures for April fell
$1.04 or about 1.6 percent to settle at $64.01 barrel on the New York
Mercantile Exchange. May Brent crude dropped $0.77 or 1.1 percent to settle at
$ 67.46 a barrel on London's Intercontinental Exchange.
Erasing prevision three session
losses, Indian rupee ended considerably higher against dollar due to selling of
the US currency by exporters and banks. Sentiments were upbeat with Finance
Minister Nirmala Sitharaman's statement that the fiscal measures taken by
government during 2020-21 have been calibrated to sustain high spending in the
economy and assist in its V-shaped recovery, resulting in a positive GDP growth
of 0.4 percent in third quarter of FY 2020-21. The economy is estimated to
contract by 8 per cent during 2020-21 due to the impact of the COVID-19
pandemic. Besides, healthy growth in the domestic equity market added to the
rupee gains On the global front, pound rose to a two-week high against the euro
and also gained versus the dollar, supported by progress in Britain's speedy
vaccination programme, with the Bank of England governor cautiously optimistic
about the recovery. Finally, the rupee ended at 72.93, stronger by 32 paise
from its previous close of 73.25 on Monday.
The FIIs as per Tuesday's data
were net seller in both equity and debt segment. In equity segment, the gross
buying was of Rs 6170.62 crore against gross selling of Rs 7372.84 crore, while
in the debt segment, the gross purchase was of Rs 83.99 crore against gross
selling of Rs 1339.95 crore. Besides, in the hybrid segment, the gross buying
was of Rs 4.07 crore against gross selling of Rs 22.78 crore.
The US markets end higher on
Tuesday as falling bond yields eased concerns about surging inflation. Asian
markets are trading mostly in green on Wednesday following overnight gains on
Wall Street, although focus will shift to Chinese markets amid worries about
policy tightening in the world's second-largest economy. Indian markets ended
higher on Tuesday with gains of around a percent, following gains in Asian
peers, mainly boosted by banking, financials and IT stocks. Today, the markets
are likely to get positive start amid firm global cues. Traders will be taking
encouragement as the Organization for Economic Co-operation and Development
(OECD) raised the projection for India's economic growth rate by 4.7 percentage
points at 12.6 per cent for 2021-22. That would enable India to retain its
earlier tag of the fastest growing large economy in the world. Also, CRISIL has
projected India's economy to grow by 11 per cent in the next fiscal year
against expected contraction of 8 per cent in 2020-21, but GDP will still tread
below the pre-Covid trend. It added that next year would be a story of two
halves with broad-based recovery to come in the second half. Some support will
come as Finance Minister Nirmala Sitharaman said monetisation of CPSE assets is
based on the principle of value creation for the government and investors and
would bring about a paradigm shift in infrastructure augmentation and
maintenance. Traders may take note of report that the Finance Ministry said the
Centre has released Rs 1.06 lakh crore to the states since October 2020 to meet
GST compensation shortfall. However, there may be some cautiousness as India
reported 16,846 fresh Covid-19 cases on Wednesday pushing the overall tally to 11,261,470,
according to Worldometer. The death toll from the deadly infection jumped to
158,079. There will be some buzz in MSME stocks as Minister of State for
Finance Anurag Thakur said banks have sanctioned loans worth Rs 2.46 lakh crore
to about 92 lakh accounts under the Rs 3-lakh crore Emergency Credit Line
Guarantee Scheme for the MSME sector. Auto stocks will be in focus with data
from the Federation of Automobile Dealers Associations (FADA) showing that
retail sales of passenger vehicles rose by 10.59 per cent in February 2021 to
2,54,058 units from 2,29,734 units in the year ago period, while two-wheeler
sales dropped by 16.08 per cent to 10,91,288 units from 13,00,364 units in the
corresponding period last year. There will be some reaction in renewable energy
sector stocks as Moody's Investors Service in its latest report said that close
to 15-20 per cent of wind and solar power projects underperformed during
2019-20. However, with portfolio diversification, it said a lot of green energy
companies will withstand the slowdown. The equity markets will remain closed
tomorrow that is March 11 on account of Mahashivratri.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,098.40
|
14,973.61
|
15,175.01
|
BSE
Sensex
|
51,025.48
|
50,577.08
|
51,292.92
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Bharat
Petroleum Corporation
|
1,997.90
|
445.45
|
437.20
|
453.85
|
Tata
Motors
|
747.02
|
315.15
|
307.05
|
325.80
|
Indian
Oil Corporation
|
299.25
|
100.60
|
98.90
|
102.60
|
State
Bank of India
|
280.54
|
387.90
|
381.80
|
394.45
|
Oil
& Natural Gas Corporation
|
268.17
|
117.00
|
114.29
|
119.64
|
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