Indian equity
benchmarks snapped 6-days winning run and ended lower by over half a percent on
Wednesday amid fag-end selling triggered by a rush for profit booking and mixed
global cues. Markets made a positive start and remained range-bound for most
part of the day, as traders took support with the Finance Ministry in its
latest the Monthly Economic Review report stating that the outlook for the
country's economy appears bright with Gross Domestic Product (GDP) likely to
clock 7 per cent growth rate next fiscal (FY25) although the nation needs to
keep a watch on global headwinds emanating from geopolitical tensions and
volatility in international financial markets. Key gauges soon turned volatile
but managed to keep their heads above water in late morning deals, taking
support from a report that retail inflation for farm workers and rural
labourers eased marginally to 7.52 per cent and 7.37 per cent in January as
compared to the previous month, mainly due to lower prices of certain food
items. However, equity markets erased initial gains and fell sharply lower in
fag-end, as traders turned cautious with provisional data from the NSE showing
that foreign institutional investors (FIIs) net sold shares worth Rs 1,335.51
crore on February 20. Traders overlooked the latest payroll data released by
the Employees' Provident Fund Organisation (EPFO) showing that the labour
market recovered slightly in December as fresh formal job creation hit a
three-month high. As per the data, in December 2023, the number of new monthly
subscribers under the Employees' Provident Fund (EPF) increased by nearly 10
per cent to 840,584 in December from 762,513 in November. Traders also paid no
heed towards the Reserve Bank of India's (RBI) latest Bulletin stating that
fresh round of capital expenditure by the corporate sector is likely to fuel
the next leg of growth. It stressed that stable and low inflation at 4 per cent
provides the bedrock for sustaining GDP expansion. Finally, the BSE Sensex fell
434.31 points or 0.59% to 72,623.09 and the CNX Nifty was down by 141.90 points
or 0.64% to 22,055.05.
The US markets ended mostly
higher on Wednesday despite the minutes of the Federal Reserve's latest
monetary policy meeting revealed most officials remain wary of cutting interest
rates too quickly. The minutes of the late-January meeting said participants
acknowledged risks to achieving the Fed's employment and inflation goals were
moving into better balance, but they remained highly attentive to inflation
risks. The Fed said in particular, they saw upside risks to inflation as having
diminished but noted that inflation was still above the Committee's longer-run
goal. Most participants subsequently highlighted the risks of moving too
quickly to lower interest rates and emphasized the importance of carefully
assessing incoming data in judging whether inflation is moving down sustainably
to the Fed's 2 percent target. On the sectoral front, despite the late-day
recovery by the broader markets, networking stocks continued to see substantial
weakness, dragging the NYSE Arca Networking Index down by 3.0 percent to its
lowest closing level in over two months. Palto Alto Networks (PANW) led the
sector lower, with the cybersecurity company plummeting by 28.4 percent after
reporting better than expected fiscal second quarter results but lowering its
forecast for full-year revenue growth. Computer hardware and software stocks also
saw considerable weakness on the day, contributing to the lower closing by the
tech-heavy Nasdaq. In the stock specific development, Shares of Nvidia have
skyrocketed this year amid optimism about demand for its AI chips, but traders
are wary of whether its results will support further upside.
Crude oil futures ended higher on
Wednesday as concerns about supply disruptions due to the tensions in the
Middle East outweighed weak outlook for demand. Due to continued attacks on
commercial vehicles in the Red Sea route, tankers have been diverting to longer
routes. Houthi rebels have reportedly said ships in the Red Sea and Arabian Sea
are their latest maritime targets. With no immediate possibility of a ceasefire
between Israel and Hamas, it is uncertain when the vessels will start using
their normal routes again. Benchmark crude oil futures for April delivery rose
$0.87 or 1.1% to settle at $77.91 a barrel on the New York Mercantile Exchange.
Brent crude for April delivery surged $0.69 or 0.84% to $83.03 per barrel on
London's Intercontinental Exchange.
Indian rupee ended higher against
the dollar on Wednesday. Traders got encouragement as economists in the Finance
Ministry said with the stable downward movement in core inflation and
moderation in food prices, the outlook for a reasonably low headline inflation
rate is good. They said the outlook for the Indian economy appears bright with GDP likely to grow by 7% next financial year beginning April 1 from an
estimated 7.3% in the current financial year. Some support also came in with
report that retail inflation for farm workers and rural labourers eased
marginally to 7.52 per cent and 7.37 per cent in January as compared to the
previous month, mainly due to lower prices of certain food items. On the global
front, dollar fell broadly on Wednesday as it tracked a global decline in bond
yields, while sterling struggled to retain gains following dovish comments from
Bank of England (BoE) Governor Andrew Bailey on the central bank's rate
outlook. Finally, the rupee ended at 82.96 (Provisional), stronger by 1 paisa
from its previous close of 82.97 on Tuesday.
The FIIs as per Wednesday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 15007.68 crore against gross selling of Rs 12034.18 crore,
while in the debt segment, the gross purchase was of Rs 2402.28 crore with
gross sales of Rs 563.33 crore. Besides, in the hybrid segment, the gross
buying was of Rs 173.24 crore against gross selling of Rs 147.73 crore.
The US markets ended mostly in
green on Wednesday after Fed FOMC minutes reiterated that the officials will be
in no hurry to start cutting rates, while signaling a likely peak in the
tightening cycle. Asian markets are trading mixed on Thursday amid largely
positive session on Wall Street overnight. Indian markets ended the range-bound
trade sharply lower on Wednesday due to fag-end selling in IT, financial, and
pharma shares. Today, markets are likely to get gap-up opening with Japan's
Nikkei hitting record highs. Sentiments will get a boost as the country's G20
Sherpa Amitabh Kant said India will be the third largest economy by 2027 and it
needs to grow at rapid rates to become a $35 trillion economy by 2047. Kant
further said that India needs to grow at 9-10 per cent year after year for the
next three decades. Besides, a study by Nasscom showed that India's digital
public infrastructure (DPIs) has the potential to drive the gross domestic
product (GDP) growth by three times till 2030. The report titled -- India's
Digital Public Infrastructure - Accelerating India's Digital Inclusion -- says
that the economic value added by DPIs could potentially increase to around 4.2
per cent of GDP by 2030, up from 0.9 per cent in 2022. However, upside may get
hurt as the US 10-year bond yield continued to quote around 4.3 per cent level.
Brent Crude Oil futures were also more or less unmoved around $83 per barrel
level. Traders may be concerned as a research report by CRISIL Market
Intelligence and Analytics showed that financial conditions have tightened the
economy with liquidity going into a deeper deficit putting upward pressure on
short-term rates. The report released during the month also said that foreign
portfolio investors turned net sellers further aggravating the tight liquidity
conditions. Some cautiousness may come as credit rating agency ICRA said
India's Gross Domestic Product (GDP) growth is projected to moderate
sequentially to 6 per cent year-on-year (YoY) in the third quarter of FY24 as
against 7.6 per cent in Q2. Sugar stocks will be in focus as the Cabinet
Committee on Economic Affairs approved a hike in the Fair and Remunerative
Price (FRP) of sugarcane to Rs 340 per quintal from Rs 315 per quintal for the
2024-25 (October-September) season. The Rs 25-per-quintal increase in the FRP
of sugarcane is significantly higher than what was announced last year, when
the government had raised it by Rs 10 per quintal to Rs 315.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
22,055.05
|
21,952.20
|
22,203.65
|
BSE
Sensex
|
72,623.09
|
72,293.16
|
73,110.40
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Steel
|
880.01
|
144.00
|
141.56
|
146.31
|
Power
Grid
|
246.51
|
279.90
|
276.29
|
286.49
|
HDFC
Bank
|
229.47
|
1436.00
|
1426.00
|
1455.00
|
State
Bank of India
|
214.65
|
772.05
|
761.94
|
779.84
|
ITC
|
194.15
|
402.75
|
399.34
|
408.14
|
- Wipro has expended collaboration
with Intel Foundry to accelerate chip design innovation.
- ONGC has received an in-principle
approval for formation of JV companies either by the company or through its
subsidiary (ies)/ associates to set up and operate 15 CBG Plants, subject to
requisite approval(s).
- TCS has expanded its partnership
with The Co-operative Group to adopt a cloud first strategy that will support
the group's business growth.
- UltraTech Cement has commissioned
a 1.8 mtpa brownfield cement capacity at Kotputli, Rajasthan.