Falling for
the second straight session, Indian equity benchmarks ended over half a percent
lower each on Wednesday mainly dragged by the healthcare, IT, finance and
banking. The benchmarks made gap-down opening, as traders were concerned as
India registered 11,795 fresh Covid-19 cases of the coronavirus disease
(Covid-19). Active cases in India stand at 137,866, while the caseload tally
has risen to 10,937,106. The country continues to be second-most-affected
globally, and ranks 17th among worst-hit nations by active cases. Some
cautiousness also came as Maharashtra chief minister Uddhav Thackeray warned
that if Covid-related norms are not followed, the state government will be
forced to reimpose a lockdown. Markets managed to cut most of their losses in
late morning session, taking support from ICRA Ratings' report that after two
consecutive quarters of contraction, India's Gross domestic product (GDP) is
set to revert to the growth territory in the October-December 2020 period
(Q3FY21) compared to the year-ago period. It also said private consumption and
government spending will help the economy post a turnaround during the December
quarter and the GDP will grow 0.7 percent.
But, key indices failed to hold recovery and fell sharply in late
afternoon deals, as sentiments remained down-beat with Rating agency Crisil
expects stressed assets of non-banking financial companies (NBFCs) to touch Rs
1.5-1.8 lakh crore or 6-7.5% of the assets under management (AUM) by the end of
the current financial year. However,
reported gross non-performing assets would be limited due to the one-time
Covid-19 restructuring window and the micro, small and medium enterprises
(MSMEs) recast scheme offered by the Reserve Bank of India (RBI). Unlike
previous crises, the pandemic has impacted almost all NBFC asset segments.
Finally, the BSE Sensex fell 400.34 points or 0.77% to 51,703.83, while the CNX
Nifty was down by 104.55 points or 0.68% to 15,208.90.
The US markets
ended mostly lower on Wednesday on inflation concerns. A separate report from
the Labor Department showed producer prices jumped by much more than expected
in the month of January. The Labor Department said its producer price index for
final demand surged up by 1.3 percent in January after rising by 0.3 percent in
December. Street had expected producer prices to increase by 0.4 percent. The
jump in producer prices, the largest since the index began in December 2009,
was partly due to higher energy prices, which skyrocketed by 5.1 percent in
January after soaring by 4.9 percent in December. In addition to the inflation
concerns, traders also have been worried the upbeat data will reduce the
pressure on lawmakers to pass additional stimulus. The Commerce Department
released a report showing retail sales rebounded by much more than anticipated in
the month of January. The Commerce Department said retail sales spiked by 5.3
percent in January after sliding by a revised 1.0 percent in December. Street
had expected retail sales to jump by 1.1 percent compared to the 0.7 percent
decrease originally reported for the previous month. Excluding sales by motor
vehicle and parts retailers, retail sales soared by 5.9 percent in January
after tumbling by a revised 1.8 percent in December.
Crude oil futures settled higher
on Wednesday as freezing weather extending as far south as Texas continues to
shut in production and keep refineries closed. Further, oil prices have moved
up because of Saudi Arabia's voluntary production cuts and an acceleration in
the COVID-19 vaccine rollout, as well as some loss of production in the
Permian. Meanwhile, weekly data on petroleum supplies have been delayed by a
day following the Presidents Day holiday on Monday. The Energy Information
Administration will issue its data on Thursday. Crude oil futures for March
rose $1.09 or 1.8 percent to settle at $61.14 barrel on the New York Mercantile
Exchange. April Brent crude surged 99 cents or 1.6 percent to settle at $64.34
a barrel on London's Intercontinental Exchange.
Indian rupee ended lower against
dollar on Wednesday, on account of sustained dollar demand from importers and
banks. Sentiments were fragile as rating agency Crisil expects stressed assets
of non-banking financial companies (NBFCs) to touch Rs 1.5-1.8 lakh crore or
6-7.5% of the assets under management (AUM) by the end of the current financial
year. Adding pessimism, loan growth is slowing across financial markets. Growth
in non-food credit slipped back below the 6% mark to 5.92% year-on-year (y-o-y)
during the fortnight ended January 29 from 6.35% y-o-y in the previous
fortnight. As on January 29, outstanding non-food credit stood at Rs 106.17
lakh crore, data from Reserve Bank of India (RBI) showed. Besides, lackluster
trade in domestic equity markets also put pressure in rupee. On the global
front; dollar rose against low-yielding currencies on Wednesday, reaching a
five-month high against the yen, as U.S. bond yields jumped on the prospects of
further economic recovery and a possible acceleration in inflation. Finally,
the rupee ended at 72.74, 5 paise weaker from its previous close of 72.69 on
Tuesday.
The FIIs as per Wednesday's data
were net buyer in equity segment and net seller in debt segment. In equity
segment, the gross buying was of Rs 7784.01 crore against gross selling of Rs
5571.89 crore, while in the debt segment, the gross purchase was of Rs 725.30
crore with gross sales of Rs 1595.69 crore. Besides, in the hybrid segment, the
gross buying was of Rs 13.91 crore against gross selling of Rs 114.20 crore.
The US markets ended mostly lower
on Wednesday as losses by technology and industrial companies offset gains in
other parts of the market. Asian markets are trading mixed on Thursday as
lingering pandemic concerns pushed against stronger economic data, and with
little firm direction from Wall Street. Indian markets ended in the red on
Wednesday as losses in financials, IT, and pharma stocks overpowered gains in
auto, media, and PSU Bank space. Today, the start of session is likely to be
slightly in green amid mixed global cues. Traders will be taking encouragement
as Global forecasting firm Oxford Economics revised India's economic growth
projection for 2021 to 10.2 per cent from the earlier 8.8 per cent, citing
receding COVID-19 risks and the shift in the monetary policy outlook. It
further said the Budget 2021-22 will create positive externalities for the
private sector, and forecast slower fiscal consolidation in FY22 than the
government projections. Traders may take note of report that the Union Cabinet
has approved signing of a comprehensive economic cooperation agreement, a kind
of a free trade pact, between India and Mauritius which is aimed at
liberalising norms to boost two-way commerce. Meanwhile, a private report
stated that India has emerged as Asia's biggest destination for financial
technology (fintech) deals, leaving behind China in the quarter ended June
2020. However, there may be some cautiousness as the government issued new
guidelines for international arrivals amid the spread of mutant variants of
coronavirus in many countries. The new Standard Operating Procedures (SOPs)
will come into effect from 23.59 hours on February 22 till further orders.
Telecom stocks will be in focus as the Union Cabinet approved a
production-linked incentive (PLI) scheme worth Rs 12,195 crore for telecom
equipment manufacturing. There will be some reaction in pharma stocks as India
Ratings and Research (Ind-Ra) does not expect Indian pharmaceutical companies
to sustain the healthy operating margins reported during 3Q FY21 and 9M FY21.
It said the India formulations business grew year-on-year (y-o-y) during 3Q FY21
and 9M FY21 while growth across other segments was lower both on
quarter-on-quarter (q-o-q) and y-o-y basis.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,208.90
|
15,148.34
|
15,291.89
|
BSE
Sensex
|
51,703.83
|
51,500.73
|
51,992.54
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State
Bank of India
|
741.61
|
411.75
|
402.99
|
417.69
|
Tata
Motors
|
521.50
|
330.15
|
325.65
|
334.45
|
Adani
Ports And Special Economic Zone
|
348.68
|
655.75
|
645.10
|
668.20
|
NTPC
|
287.74
|
99.35
|
97.51
|
100.66
|
Power
Grid Corporation Of India
|
219.57
|
230.05
|
224.44
|
233.44
|
Adani Ports and Special Economic Zone has completed the acquisition of 100% stake of Dighi Port for Rs 705 crore on February 15, 2021.
Tech Mahindra and IBM are deepening their collaboration, especially in areas like 5G, hybrid cloud, automation and cybersecurity, as the two tech giants work towards building $1 billion ecosystem over the next three years.
ICICI Bank is planning to buy stakes in two fintech companies -- CityCash and Thillais Analytical Solutions -- for a total cash consideration of Rs 6.03 crore.
Dr. Reddy's Laboratories along with its subsidiaries, have launched Capecitabine Tablets, USP a therapeutic equivalent generic version of Xeloda Tablets approved by the USFDA.