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NSE Intra-day chart (17 February 2021)
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Market Commentary 18 February 2021
Markets likely to open in green on Thursday


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)



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  • 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.
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