Indian equity
benchmarks snapped their 2-day losing streak and ended higher in a lacklustre
trade on Thursday amid stock-specific bets by investors. Markets made negative
start as traders got anxious with Fitch's statement that India's medium-term
growth outlook will assume a more critical role in sovereign assessment due to
higher deficits and a slower consolidation path. Also, India recorded 12,760
fresh Covid-19 cases of the coronavirus disease (Covid-19). However, benchmark
indices soon turned positive and traded in a narrow range on the back of
heightened volatility owing to weekly expiry of index derivative contract.
Traders also took note of SBI Research revised its contraction forecast for the
current fiscal year to 7 per cent. The agency had earlier forecast a 7.4 per
cent contraction in 2020-21 GDP numbers. Markets extended gains in last hour of
trading session, taking support from Industry body the Confederation of Indian
Industry (CII) stating that steps taken by the government is helping the
country's exports to record positive growth and the trend is expected to
continue. Sentiments remained positive with Engineering Export Promotion
Council of India stating the country's engineering exports have increased by
18.69 per cent in January this year and demand for such products in the
international markets is expected to be steady in the remaining two months of
the current fiscal. Some support also came with private report stated that the
job market continues to improve sequentially across the country and job
postings in some industries have improved, with some doing even better than the
pre-Covid levels, led by IT, agro-based sectors. Finally, the BSE Sensex rose
222.13 points or 0.43% to 51,531.52, while the CNX Nifty was up by 66.80 points
or 0.44% to 15,173.30.
The US markets ended mostly higher
on Thursday on optimism about additional stimulus continued to support the
markets along with largely upbeat earnings news, a slowdown in the rate of
coronavirus infections and accelerated vaccine rollouts. Traders have recently
seemed somewhat reluctant to make substantial moves amid concerns the markets
are becoming overbought. However, the chopping trading on market came as buying
interest was somewhat subdued following recent strength, but traders also
largely refrained from cashing in on the recent gains amid concerns about
missing out on further upside. Traders were also digesting a report from the
Labor Department showing jobless claims decreased from an upwardly revised
level but came in above estimates. The Labor Department said initial jobless
claims edged down to 793,000 in the week ended February 6th, a decrease of
19,000 from the previous week's revised level of 812,000. Street had expected
jobless claims to drop to 757,000 from the 779,000 originally reported for the
previous week.
Crude oil futures ended lower on
Thursday after eight straight days of gains. There is speculation that Saudi
Arabia might consider reducing output by less than 1 million barrels per day.
Meanwhile. a report from the European Commission, which said in its interim
Winter forecast that the near-term outlook for the euro area looks weaker than
expected last autumn, as the pandemic tightened its grip on the region. EC
expects the euro area to grow 3.8% this year, instead of 4.2% projected
previously. The outlook for 2022 was raised to 3.8% from 3%. Crude oil futures
for March fell $0.44 or 0.8 percent to settle at $58.24 barrel on the New York
Mercantile Exchange. April Brent crude dropped $0.60 or 0.98 to settle at
$60.87 a barrel on London's Intercontinental Exchange.
Indian rupee ended marginally
lower against the US dollar on Thursday, on increased demand for the greenback
from importers and banks. Investors were concerned with Fitch Ratings'
statement that India's high fiscal deficit would pose a challenge in lowering
the debt to GDP ratio, which is expected to rise above 90 percent in the next
five years. It said the country entered the coronavirus disease (covid-19)
pandemic with little fiscal headroom from a rating perspective. However,
downfall remain capped as DIPAM Secretary Tuhin Kanta Pandey stated that the
new PSE policy announced by the government has opened a host of opportunities
for the private players who now partake in India's growth story by buying the
brownfield assets of public sector enterprises at an attractive valuation. On
the global front, IHS Markit's report states that the trading in
euro-denominated swaps has fallen sharply in London since Brexit, with volumes
moving to New York, Amsterdam and Paris, financial data company. EU platforms
accounted for a quarter of the euro swaps market in January, up from just 10% in
July last year. Finally, the rupee ended at 72.87, 3 paise weaker from its
previous close of 72.84 on Wednesday.
The FIIs as per Thursday's data
were net buyer in equity segment, while net seller in debt segment. In equity
segment, the gross buying was of Rs 9054.25 crore against gross selling of Rs
7169.84 crore, while in the debt segment, the gross purchase was of Rs 859.63
crore with gross sales of Rs 1121.65 crore. Besides, in the hybrid segment, the
gross buying was of Rs 3.57 crore against gross selling of Rs 38.32 crore.
The US markets ended mostly
higher on Thursday with investors betting on more fiscal stimulus to ride out a
coronavirus-driven recession as data showed a stalling recovery in the labor
market. In Asian markets, only Nikkei is trading lower on Friday with major
markets in Asia remain closed. Indian markets ended higher on Thursday,
snapping 2 days of losses, mainly led by a rise in heavyweight Reliance
Industries. Today, the markets are likely to open in red following mixed global
cues. Some support will come as the government approved applications from
several medical devices manufacturers under the Production Linked Incentive
(PLI) scheme for the promotion of domestic manufacturing. Traders may take note
of Commerce and Industry Minister Piyush Goyal's statement that the government
has constituted a committee comprising members from public and private sectors
to look into issues like promoting localisation and boosting manufacturing.
Meanwhile, the government sought Parliament's approval for gross additional
expenditure of Rs 6.28 lakh crore for 2020-21 as part of the second and final
batch of supplementary demands for grants. The proposals involve net cash outgo
of Rs 4.13 lakh crore while the remaining amount will be matched by savings of
ministries or enhanced receipts. There will be some buzz in sugar sector stocks
with trade body All India Sugar Trade Association's (AISTA) statement that
India's sugar exports may drop over 24 per cent to around 4.3 million tonnes in
the current marketing season 2020-21, due to logistics constrains and less
chances of shipments to Iran. Banking stocks will be in focus as Moody's
Investors Service said India's economic recovery reduces the risk of a sharp
deterioration in public sector banks' asset quality, but the capital would
remain insufficient to support credit growth and absorb unexpected shocks.
There will be some reaction in jewellery industry stocks with data of the Gem
Jewellery Export Promotion Council (GJEPC) showing that gems and jewellery
exports dipped 7.8 percent in January to $2.7 billion as against $2.9 billion a
year ago.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,173.30
|
15,096.30
|
15,219.40
|
BSE
Sensex
|
51,531.52
|
51,261.73
|
51,696.87
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
552.57
|
325.00
|
321.81
|
329.76
|
Hindalco
Industries
|
473.56
|
295.40
|
284.39
|
301.89
|
Gail
(India)
|
457.43
|
136.45
|
133.70
|
138.60
|
ITC
|
436.31
|
226.45
|
224.20
|
229.00
|
State
Bank of India
|
363.92
|
390.15
|
386.61
|
395.31
|
SBI is preparing to start a co-lending model for home loans with an aim to increase its presence in the unorganised segment.
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Tata Motors' Tata Nexon EV continues to expand its presence across India, exhibiting a significant growth across the southern region in India.
Axis Finance, a subsidiary of Axis Bank, has inaugurated its regional office at Trinity Mall.