Indian equity
benchmarks closed higher for a fourth straight session and gained over half a
percent on Friday amid strength in other global markets. After an optimistic start, markets edged
gradually higher as traders took encouragement with the government data showing
that India's exports rose to a three-month high of 3.12 per cent to $36.92
billion in January despite global uncertainties including the Red Sea crisis,
while the trade deficit narrowed to a nine-month low of $17.49 billion. After
recording negative growth for two months in a row, imports grew by about 3 per
cent to $54.41 billion in January. Domestic sentiments remained up-beat with
Commerce Secretary Sunil Barthwal's statement that the negotiations for the
proposed India-UK free trade agreement are at an advanced stage, and both sides
are working to iron out differences on the remaining issues. A positive
momentum continued over the Dalal Street in late afternoon deals, taking
support from statutory body, Employees' State Insurance Corporation' (ESIC)
latest provisional payroll data showing that 18.86 lakh new employees have been
added in the month of December 2023. Around 23,347 new establishments have been
registered and brought under the social security umbrella of the Employees'
State Insurance Scheme in the month of December 2023, thus ensuring coverage to
more workers. Some support also came with the commerce ministry stating that
the next round of negotiations between India and South American nation Peru for
a free trade agreement (FTA) is expected to start in April 2024. The proposed
agreement is aimed at promoting bilateral trade and investments between the two
countries. Traders took note of a report by the Centre for Economics and
Business Research (CEBR) stating that it has been a remarkable year for
equities with the Nifty 50 rallying 22 percent in 2023 and the Sensex gaining
20 percent in the same period. Besides, it said India is currently a $3.7
trillion economy and is expected to grow to about $6 trillion by 2030 and $10
trillion by 2035. Finally, the BSE Sensex rose 376.26 points or 0.52% to
72,426.64 and the CNX Nifty was up by 129.95 points or 0.59% to 22,040.70.
The US markets ended higher on
Friday amid concerns that Federal Reserve may not consider lowering interest
rate anytime soon following a robust producer price inflation (PPI) data. Data
from the Labor Department showed a bigger than expected increase in U.S.
producer prices in the month of January. The report said the producer price
index for final demand rose by 0.3 percent in January after edging down by 0.1
percent in December. Street had expected producer prices to inch up by 0.1
percent. Excluding prices for food, energy, and trade services, core producer
prices climbed by 0.6 percent in January after rising by 0.2 percent in
December. The report also showed the annual rate of producer price growth
slowed to 0.9 percent in January from 1.0 percent in December. Economists had
expected the pace of growth to decelerate to 0.6 percent. Also, the 10-year
Treasury yield spiked above 4.3% following the hot PPI reading. At one point,
the 2-year Treasury yield topped 4.7%, the highest since December. However, the
negative sentiment was partly offset by a separate report from the University
of Michigan showing an uptick in consumer sentiment in the month of February.
The report said the consumer sentiment index inched up to 79.6 in February
after spiking to 79.0 in January. With the increase, the consumer sentiment
index reached its highest level since hitting 81.2 in July 2021. Improving
consumer confidence can often lead to greater spending, which can support
economic growth. Since the pandemic, however, consumer spending has been mostly
healthy even when measures of sentiment were quite low.
Crude oil futures settled higher
on Friday, lifting the WTI Crude futures to a 11-week high, due to concerns
about potential supply disruptions amid rising tensions in the Middle East
offset a weak demand outlook for oil. The growing risk of a wider conflict in
the Middle East supported crude prices. According to reports, Gaza's largest
functioning hospital was under siege on Friday in Israel's war with Islamist
group Hamas, as warplanes struck Rafah, the last refuge for Palestinians in the
enclave. Benchmark crude oil futures for March delivery rose $1.16 or 1.49% to
settle at $79.19 a barrel on the New York Mercantile Exchange. Brent crude for
April delivery gained $0.51 or 0.63% to $83.87 per barrel on London's Intercontinental
Exchange.
Indian rupee ended higher against
the U.S. dollar on Friday amid positive sentiment in the domestic equity
markets and softening crude oil prices. Traders got encouragement as commerce
ministry in its latest data has said that India's merchandise exports rose to a
three-month high of 3.12 per cent to $36.92 billion in January 2024 as compared
to $35.80 billion in January 2023 despite global uncertainties including the
Red Sea crisis. In contrast, imports also rose by about 3 per cent to $54.41
billion in January 2024 as compared to $52.83 billion in January 2023. On the
global front, dollar firmed on Friday after two days of declines but was still
on track for its fifth straight weekly gain as investors scaled back
expectations for Federal Reserve rate cuts. Finally, the rupee ended at 83.01
(Provisional), stronger by 4 paise from its previous close of 83.05 on
Thursday.
The FIIs as per Friday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 15021.09 crore against gross selling of Rs 13878.04 crore,
while in the debt segment, the gross purchase was of Rs 1553.00 crore with
gross sales of Rs 694.82 crore. Besides, in the hybrid segment, the gross
buying was of Rs 21.83 crore against gross selling of Rs 6.89 crore.
The US markets ended lower on
Friday as yields rose on the back of steeper-than-expected rise of 0.3 per cent
in US Producer Price Index for January as against 0.1 per cent expectation.
Asian markets are trading mixed on Monday as China equities opened higher on
resuming trade after a one-week holiday and after China's central bank left
rates untouched on Sunday. Indian markets closed higher for a fourth straight session
on Friday tracking gains in blue chips like L&T, Infosys and M&M, amid
strength in other global markets. Today, markets are likely to continue their
northward journey with positive start amid mixed global cues. Investors will be
eyeing the RBI and US FOMC's latest meeting minutes to be out later in the
week. Some support will come as India's outward foreign direct investment (FDI)
commitments rose by 25.7 per cent on a year-on-year (Y-o-Y) basis to $2.09
billion in January 2024, compared to over $1.66 billion in January 2023.
Traders will be taking encouragement as India's G-20 Sherpa and former NITI
Aayog CEO Amitabh Kant said India needs to grow at an annual rate of 9-10 per
cent for around three decades and constant innovations to become a $35 trillion
economy by 2047. Traders may take note of a State of India's Digital Economy
Report, 2024, by Indian Council for Research on International Economic
Relations (ICRIER), stating that India is the third largest digitalised country
in the world, only behind the United States of America (USA) and China.
Besides, Ashima Goyal, an external member of the Reserve Bank of India's (RBI)
Monetary Policy Committee (MPC) has said India's headline inflation rate should
soon come down to core inflation levels. Meanwhile, the government has
operationalised the central processing centre for processing filings under the
companies law and LLP Act in a time-bound and faceless manner as part of
efforts to further improve the ease of doing business. However, there may be
some cautiousness as latest data by Reserve Bank of India (RBI) showed that
India's foreign exchange reserves dipped by of $5.24 billion to $617.23 billion
for the week ending on February 9. IT stocks will be in focus as Nasscom's -
Strategic Review 2024: Rewiring Growth in the Changing Tech Landscape - showed
that with the Indian information-technology (IT) industry's growth rate falling
to a low single digit, the ambition of becoming a $350 billion industry by 2026
seems a difficult task. The sector is expected to touch $253.9 billion in FY24,
growing at 3.8 per cent year-on-year. Growth has fallen from the 8.4 per cent
in the previous financial year. Stocks related to defence industry will be in
limelight with a report that the Defence Ministry has given approval for a
proposal to buy nine maritime surveillance aircraft for the Indian Navy and six
maritime patrol aircraft for the Indian Coast Guard.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
22,040.70
|
21,983.55
|
22,083.25
|
BSE
Sensex
|
72,426.64
|
72,248.05
|
72,575.28
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ITC
|
375.19
|
404.60
|
399.49
|
409.64
|
BPCL
|
278.72
|
652.90
|
640.55
|
676.60
|
State
Bank of India
|
273.65
|
757.35
|
748.94
|
770.19
|
ONGC
|
270.45
|
274.70
|
270.70
|
278.35
|
Power
Grid
|
251.29
|
274.50
|
270.90
|
280.50
|
- Cipla has tied up with
CSIR-Central Drug Research Institute to jointly develop a novel ophthalmic
formulation for fungal keratitis.
- M&M and Volkswagen Group have
signed the first supply agreement on components of Volkswagen's MEB for
Mahindra's purpose-built electric platform INGLO, taking a definitive step
further on their joint vision for e-mobility collaboration.
- Bharti Airtel has launched four
new, next-gen Company owned stores in the city of Cochin.
- Tata Motors along with its
authorised distributor - Tata Africa Holdings has launched its successful range
of multipurpose heavy-duty trucks - Ultra T.9 and Ultra T.14, in South Africa.