Indian equity
benchmarks witnessed a sharp sell-off on Friday, mirroring losses in other
global markets as a rout in global bond markets sent yields flying and spooked
investors amid fears the heavy losses suffered could trigger distressed selling
in other assets. Frontline gauges settled below their crucial 49,100 (Sensex)
and 14,550 (Nifty) levels. Markets, after a gap-down start, traded with
pessimism throughout the session, as traders remained concerned ahead of the Q3
gross domestic product (GDP) data, to be released later in the day, which will
shed light on whether the economy continued to be in recession in the third
quarter of FY21 or it ended with the second quarter only. Sentiments also remained
dampened with Moody's Investors Service stating that loans to retail customers,
especially those to low-income borrowers, will remain most affected due to the
shock caused by the coronavirus pandemic. Benchmarks continued to witness
intense selling pressure in late trade amid reports that capital markets
regulator Sebi chairman Ajay Tyagi acknowledged the systemic risk concerns
raised by the RBI and Financial Stability Board over a disconnect between
markets and the real economy, but said that this is a global phenomenon also
observed in India. He said that after the massive fall in markets in March
2020, a strong rebound starting from April was the sharpest V-shaped recovery
in the last 30 years. Traders also took a note of WTO review report stated that
India's trade policy had remained largely unchanged since the previous review
(in 2015), with continued heavy reliance on instruments such as the tariff,
export taxes, minimum import prices, import and export restrictions, and
licensing. On customs duties, it said, concerns were expressed with respect to
its complexity and uncertainty, the increase in tariff rates, tariff
preferences and tariff concessions. Finally, the BSE Sensex fell 1939.32 points
or 3.80% to 49,099.99, while the CNX Nifty was down by 568.20 points or 3.76%
to 14,529.15.
The US markets
ended a volatile session mostly in red on Friday as traders kept a close eye on
activity in the bond markets following the recent spike in yields. However, a
rebound by tech stocks contributed to an advance by the Nasdaq. Yields also
fluctuated as the day progressed, rebounding near the unchanged line after
seeing early weakness before moving to the downside in afternoon trading. The
fluctuations in the bond markets came following the release of another batch of
largely upbeat US economic data. A report from the Commerce Department showed
US personal income skyrocketed in the month of January, reflecting the issuance
of $600 stimulus checks. The Commerce Department said personal income spiked by
10.0 percent in January after rising by 0.6 percent in December. Street had
expected personal income to soar by 9.5 percent. The report also showed a
significant rebound in personal spending, which surged up by 2.4 percent in
January after falling by a revised 0.4 percent in December. Street had expected
personal spending to jump by 2.5 percent compared to the 0.2 percent dip
originally reported for the previous month. However, the report also showed
inflation remained relatively tame. A reading on inflation said to be preferred
by the Federal Reserve showed the annual rate of core consumer price growth
ticked up to 1.5 percent in January from 1.4 percent in December. Concerns
about inflation have recently weighed on treasuries despite Fed Chair Jerome Powell's
repeated assurances the central bank plans to maintain interest rates at
near-zero levels for the foreseeable future.
Crude oil futures closed
considerably lower on Friday, as the dollar gained strength and jitters ahead
of next week's meeting of the Organization of the Petroleum Exporting Countries
(OPEC) and its allies prompting the US crude benchmark to pull back from a
22-month high. OPEC+ ministers are scheduled to meet on March 3 and March 4 to
discuss production curbs. According to a report from Baker Hughes, oil and
natural gas rigs count in the US surged for a seventh month, rising by 5 to 402
this week. However, the addition of 18 rigs in February, is much less compared
to the addition of 33 rigs and 31 rigs in January and December, respectively. Crude
oil futures for April declined $2.03 or 3.2 percent to settle at $61.50 barrel
on the New York Mercantile Exchange. April Brent crude fell 75 cents or 1.1
percent to settle at $66.13 a barrel on London's Intercontinental Exchange.
Indian rupee ended substantially
lower against dollar on Thursday tracking weak Asian currencies and heavy
selling in the domestic equities. Traders took a note of WTO review report
stating that India's trade policy had remained largely unchanged since the
previous review (in 2015), with continued heavy reliance on instruments such as
the tariff, export taxes, minimum import prices, import and export
restrictions, and licensing. On customs duties, it said, concerns were
expressed with respect to its complexity and uncertainty, the increase in
tariff rates, tariff preferences and tariff concessions. On the global front,
dollar rose against most major currencies on Friday, lifted by an increase in
U.S. bond yields overnight, while the pound dropped to its lowest in over a
week. Finally, the rupee ended at 73.47, 1.04 paise weaker from its previous
close of 72.43 on Thursday.
The FIIs as per Friday's data
were net buyer in equity segment, while net seller in debt segment. In equity
segment, the gross buying was of Rs 15542.53 crore against gross selling of Rs
13752.39 crore, while in the debt segment, the gross purchase was of Rs 376.69
crore with gross sales of Rs 2404.40 crore. Besides, in the hybrid segment, the
gross buying was of Rs 9.33 crore against gross selling of Rs 56.45 crore.
The US markets closed mostly in
red on Friday after a steep rise in benchmark US Treasury yields. Asian markets
are trading in green on Monday as some semblance of calm returned to bond
markets after last week's wild ride, while progress in the huge US stimulus
package underpinned optimism about the global economy. Indian markets saw the
biggest single-day fall in 10 months, ending nearly 4 percent lower on Friday
following a massive selloff in the global peers. Today, the start of new month
is likely to be optimistic following Asian peers. Markets will react to the Q3
GDP print that came out post-market hours on Friday. India managed to swing
back in the green with a 0.4 per cent rise in the GDP after two consecutive
quarters of decline, a downward revision of FY21 GDP in the second advance
estimates to -8 per cent could disappoint Street. Also, India Inc said the
recouping of the country's economy to a positive trajectory in the third
quarter is a promising sign as it portends the end of the pandemic-induced
recessionary phase seen in the first-half of the fiscal year. On the economic
front, Markit Manufacturing PMI data is scheduled to be out today. Some support
will come as data released by the Ministry for Commerce and Industry showed
that the core sector index, which measures output of eight infrastructure
industries, rose marginally by 0.1 per cent in January, indicating a wobbly
recovery from the pandemic shock. Output in five of the eight crucial sectors
fell on a year-on-year (YoY) basis. However, traders may be concerned as
India's count of active cases has jumped to 170,293. On Sunday, the country
registered 15,616 fresh Covid-19 cases, taking its the caseload tally to
11,112,056. There may be some cautiousness as the central government's fiscal
deficit soared to Rs 12.34 lakh crore or 66.8 per cent of the revised budget
estimates at the end of January of the current fiscal. The fiscal deficit at
the end of January in the previous financial year was 128.5 per cent of the
Revised Estimates (RE). In the current fiscal ending March 31, the fiscal
deficit is likely to touch Rs 18.48 lakh crore or 9.5 per cent of the GDP.
Meanwhile, the government extended the deadline for filing GST annual returns
for 2019-20 fiscal by a month till March 31. This is the second extension given
by the government. The deadline was earlier extended from December 31, 2020, to
February 28. metal stocks will be in focus as India registered a growth of 7.6
per cent in crude steel production at 10 million tonne (MT) in January 2021.
The country had produced 9.3 MT crude steel during the same month last year.
there will be some reaction in power stocks as total dues owed by electricity
distribution companies to power producers rose nearly 24 per cent to Rs
1,36,966 crore in December 2020 compared to the same month a year ago,
reflecting stress in the sector. Shares of automobile companies will be in
focus today as they will release February sales data.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
14,529.15
|
14,358.11
|
14,809.81
|
BSE
Sensex
|
49,099.99
|
48,526.87
|
50,036.70
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Bharti
Airtel
|
1,948.87
|
556.30
|
543.39
|
577.59
|
Coal
India
|
941.15
|
152.20
|
147.46
|
159.96
|
Tata
Motors
|
919.01
|
322.95
|
326.29
|
326.29
|
NTPC
|
673.31
|
107.30
|
104.41
|
110.56
|
State
Bank of India
|
644.50
|
390.15
|
384.44
|
398.44
|
SBI and Shapoorji Pallonji Real Estate have signed a MoU to enable faster processing of home loans, approvals and to provide other benefits.
Kotak Mahindra Bank has agreed to subscribe 4,995 Equity Shares in Ferbine for a consideration of Rs 49,950 translating into an equity shareholding of 9.99%.
HCL Technologies' wholly-owned step-down subsidiary -- HCL America Inc has approved a proposal for issuing senior unsecured notes of up to $500 million.
Wipro has completed the acquisition of stake in Eximius Design, a leading engineering services company with strong expertise in semiconductor, software and systems design.