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NSE Intra-day chart (03 March 2021)
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Market Commentary 04 March 2021
Benchmarks likely to make gap-down opening amid feeble global cues


Indian equity benchmarks sustained the joy of closing in the positive territory for the third successive session on Wednesday, where frontline gauges garner gains of over two percent each, recapturing their crucial 51,400 (Sensex) and 15,200 (Nifty). The markets rally was driven by firm global cues as well as gains in index heavyweights such as Bajaj Finserv, Reliance Industries, Bajaj Finance and ICICI Bank. Key gauges made positive start and stayed in green throughout the session, amid assurances from the government that it had enough COVID-19 vaccine doses to cover its population. The government said there were plenty of COVID-19 vaccines for the country even though it has sent quantities abroad. Sentiments also got boost with Principal economic advisor to the finance ministry Sanjeev Sanyal's statement that Indian economy is recovering much faster than expected and the government will spend on building infrastructure rather than boosting consumer demand artificially. He also said the country needs to keep the growth momentum and it is the only means to create employment and reduce poverty. Key indices extended their upward momentum in the late afternoon session, as the growth of India's service sector expanded at the fastest rate in the month of February, owing to a quicker increase in new orders. Moreover, the roll-out of coronavirus disease 2019 (COVID-19) vaccines led to an improvement in business confidence towards growth prospects. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index surged to 55.3 in February from 52.8 in January. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services - also jumped to 57.3 in February from 55.8 in January. Sentiments were lifted by Former Niti Aayog Vice Chairman Arvind Panagariya's statement that India's economy is on an upswing and the government's plans for increased spending comes in the backdrop of pro-growth reforms. However, he said that it might take longer to become a $5 trillion economy due to the coronavirus pandemic-induced disruptions. Additional support also came as RBI governor Shaktikanta Das expressed optimism about the overall COVID-19 situation following the rollout of the vaccines and complimented all the SAARC central banks for their efforts in combating the pandemic. Traders paid no heed to India's exports marginally declined 0.25 per cent to $27.67 billion in February while imports grew by 6.98 per cent to $40.55 billion during the month. The exports during April-February 2020-21 period stood at $255.92 billion. In the same period a year ago, it was at $291.87 billion, showing a negative growth of 12.32 per cent. Finally, the BSE Sensex rose 1147.76 points or 2.28% to 51,444.65, while the CNX Nifty was up by 326.50 points or 2.19% to 15,245.60.


The US markets settled lower on Wednesday, extending the pullback seen in the previous session, as bond yields showed a notable rebound after trending lower over the past few sessions. Yields remain well off the highs set last week, but renewed concerns about the outlook for interest rates and inflation weighed on highly-flying tech stocks. The rebound by yields came amid optimism about the coronavirus vaccine rollouts, which had also contributed to an advance by stocks futures before the bond markets opened. President Joe Biden announced the US will have enough vaccine supply for every adult in America by the end of May. Biden cited the emergency use authorization issued for Johnson & Johnson's vaccine as well as a collaboration between J&J and Merck to expand production of the single-dose vaccine. On the economic data front, payroll processor ADP released a report showing much weaker than expected private sector job growth in the month of February. ADP said private sector employment rose by 117,000 jobs in February after climbing by an upwardly revised 195,000 jobs in January. Street had expected employment to increase by 177,000 jobs compared to the addition of 174,000 jobs originally reported for the previous month. The Institute for Supply Management (ISM) released a report showing a slowdown in the pace of growth in US service sector activity in the month of February The ISM said its services PMI dropped to 55.3 in February from 58.7 in January, although a reading above 50 still indicates growth in the sector. Street had expected the index to come in unchanged.


Crude oil futures ended higher on Wednesday amid speculation the Organization of the Petroleum Exporting Countries and allies might decide to extend production curbs for the near future. The members of the organization and allies, collectively named OPEC+, are scheduled to meet on Thursday. It is now widely expected that the group may decide to maintain output curbs for a longer duration. However, data released by Energy Information Administration (EIA) showed US crude inventories increased by 21.6 million barrels in the week ended February 27, as against an expected a drop of approximately 930,000 barrels. The American Petroleum Institute (API) reported on Tuesday that US crude stocks rose by 7.4 million barrels for the week ended Feb. 26, in stark contrast to street estimate for a draw of 928,000 barrels. Crude oil futures for April rose $1.53 or 2.62 percent to settle at $61.28 barrel on the New York Mercantile Exchange. May Brent crude surged $1.75 cents or 2.8 percent to settle at $64.45 a barrel on London's Intercontinental Exchange.


Indian rupee continued its upward momentum for the second day and ended fairly higher against US dollar on Wednesday, on the back of selling of the American currency by exporters. Sentiments were upbeat as India's services activity expanded at the fastest rate in a year during February, while employment fell further and companies noted the sharpest rise in overall expenses. Additional support came with Former Niti Aayog Vice Chairman Arvind Panagariya's statement that India's economy is on an upswing and the government's plans for increased spending comes in the backdrop of pro-growth reforms. Firm trade in Indian equity markets also added to rupees strength. On the global front, sterling steadied against the dollar on Wednesday and gained against the euro ahead of the announcement of Britain's budget for the coming fiscal year, which is expected to prop up the economy as it prepares for a reopening from lockdowns. Finally, the rupee ended at 72.72, 65 paise stronger from its previous close of 73.37 on Tuesday.


The FIIs as per Wednesday's data were net buyer in equity segment, while net seller in debt segment. In equity segment, the gross buying was of Rs 9395.34 crore against gross selling of Rs 6745.99 crore, while in the debt segment, the gross purchase was of Rs 382.78 crore with gross sales of Rs 2052.99 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.79 crore against gross selling of Rs 16.96 crore.


The US markets ended lower on Wednesday as investors sold off technology stocks, while the dollar rose even as US jobs data disappointed investors. Asian markets are trading mostly in red on Thursday taking cues from overnight declines on Wall Street as bond yields rose yet again. Indian markets ended higher for the third straight session on Wednesday, with frontline indices rising 2-3 percent, backed by growing economic optimism and vaccination drive picking up pace. Today, markets are likely to make gap-down opening amid feeble global cues. Besides, the weekly options expiry may keep the session volatile. Traders will be concerned as India's tally of coronavirus cases has risen to 11,156,748, with a daily increase of 15,000 in total cases. Death toll has reached 157,471, with 110 fatalities in a day. India's count of active cases has jumped to 175,044. The country continues to be second-most-affected globally, and ranks 13th among worst-hit nations by active cases. The five most affected states by total cases are Maharashtra (2,169,330), Kerala (1,064,279), Karnataka (952,037), Andhra Pradesh (890,080), and Tamil Nadu (852,478). Maharashtra is now contributing more than half of fresh coronavirus infections in India, fanning fears of a second wave in the state. Traders may take note of report that Commerce and Industry Minister Piyush Goyal has said the need of the hour is to reduce logistics cost in the country as India cannot be competitive if this cost remains high. Meanwhile, Securities and Exchange Board of India (SEBI) has asked stock exchanges, clearing corporations and depositories to put in place code of conduct and institutional mechanism to prevent fraud or market abuse by them and their designated persons. Under this, managing director (MD) / chief executive officer (CEO) of MIIs will be obligated to frame code of conduct and put in place an institutional mechanism. There will be some buzz in insurance industry stocks as the finance ministry said that the government has amended insurance ombudsman rules, bringing insurance brokers within their ambit and also allowed policyholders to file online complaints. The amended rules have enlarged the scope of complaints to ombudsmen from only disputes earlier to deficiencies in service on the part of insurers, agents, brokers and other intermediaries. Construction equipment sector stocks will be in focus as ICRA revised the outlook on the construction equipment (CE) sector to stable from negative, following strong ramp up in volumes. Heightened focus on infrastructure spend, particularly in the road infrastructure segment has led to a sharp scale up in volumes since July 2020 (20%+ Y-o-Y growth during July-Janད period). There will be some reaction in sugar industry stocks as ISMA said that India's sugar production rose by 20 per cent to 233.77 lakh tonnes in the first five months of 2020-21 marketing year ending September on higher cane production, and demanded hike in MSP of the sweetener to boost mills' liquidity position.


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  • Reliance Industries' telecom arm -- Jio has acquired the right to use spectrum in all 22 circles across India in the recently concluded spectrum auctions. 
  • TCS has launched the TCS Mittelstand Enterprise Suite, a ready-to-deploy, modular set of services and solutions, designed specifically for German medium-sized and family-owned companies in the manufacturing industry.   
  • Tata Motors' wholly owned subsidiary -- JLR has set up charging infrastructure across 22 retail outlets in the country as it prepares to launch its all-electric SUV, Jaguar I-PACE, later this month. 
  • Maruti Suzuki India has declared that its service network has crossed 4,000 outlet mark across the country, covering 1,989 towns and cities.
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