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equity markets commenced the week on a sluggish note as the benchmarks
showcased an unenthusiastic performance on Monday and settled with moderate
cuts of over quarter percent. Marketmen turned cautious over the Centre's
future reform policies in view of appointment of Yogi Adityanath as the Chief
Minister of the country's most populous state. The MP from Gorakhpur, who lacks
administrative experience, was unanimously elected the BJP legislature party
leader at a meeting of the newly elected MLAs, in a move that took many by
surprise. Sentiments remained subdued with a report that the all India Consumer
Sentiments Index, measured by the BSE and CMIE, has hit a one-year low at 92.25
compared to 99.65 a year ago. This comes even as the wholesale price index
based inflation jumped up to a 39-month high of 6.55%. However, losses remained
capped with the report that the Cabinet approved four bills to implement a
planned Goods and Services Tax (GST) bills, paving the way for Prime Minister
NarendraModi to implement the landmark tax reform from July. The four bills are
likely to be taken up by Parliament this week and a separate state GST bill in
state assemblies later. Some support also came with the report that the
implementation of GST is likely to be fiscally neutral and its impact on
inflation is expected to be less than 20 basis points. Further, India has begun
the process of dismantling some of the last remaining controls in the foreign
direct investment (FDI) framework. The department of economic affairs (DEA) has
floated a draft Cabinet note for inter-ministerial consultation to scrap the
Foreign Investment Promotion Board (FIPB), in line with a plan announced by
finance minister ArunJaitley in his February 1 budget.
benchmark got off to a sedate opening tracking the dismal leads prevailing in
Asian markets following Wall Street's declines and the G20's decision to drop a
pledge to avoid trade protectionism. Thereafter, the indices traded in tight
range below neutral line with moderate losses for most part of the session.
Finally, the NSE Nifty, took a cut of over quarter percent to settle below the
crucial 9,150 support level, while BSE Sensex slipped by over hundred points
and closed above the psychological 29,500 mark.
Asian markets made a mixed closing on Monday
markets ended mixed on Monday following Wall Street's decline and the G20's
decision to drop a pledge to avoid trade protectionism, while the Federal
Reserve's less hawkish-thanexpected comments continued to weigh on the dollar.
Chinese stocks bucked the weak trend to close higher, as gains among energy
stocks offset declines in the realty sector. China's property market picked
pace in February despite the government announcing a raft of measures to temper
speculative demand, data showed on Saturday. Japanese markets were closed for
the Vernal Equinox holiday.
US markets closed mostly lower on Monday
markets closed mostly lower on Monday, as investors were reluctant to make big
bets without major economic or corporate news. Chicago Fed President Charles
Evans said that the Federal Reserve is on track to raise interest rates twice
more this year after a policy tightening last week and it could be more or less
aggressive depending on inflation and fiscal policies from the Trump
administration. The public comments from Evans were among the first since the
US central bank lifted its policy rate a notch last week, as expected. It also
forecast roughly two more moves in 2017 in a nod to low unemployment and some
inflation pressures. Evans, who is a voter on the Fed’s policy-setting
committee this year and supported last week’s move, also echoed a comment from
Fed Chair Janet Yellen that suggested the central bank could try to push inflation,
now at 1.7 percent, above a 2-percent target. Evans added that while that level
of growth could be reached in any given year, he said it was hard to imagine
given the economy is already doing well, the labor market is very strong, and
sectors like automobile sales are at all-time highs. There is room to get
inflation up to 2 percent and in fact going beyond 2 percent a little bit to
make sure we get there, and that it’s a symmetric inflation objective.
economy front, the Chicago Fed national activity index rose more-than-expected
last month. Federal Reserve Bank of Chicago said that Chicago Fed National
Activity Index rose to a seasonally adjusted 0.34, from -0.02 in the preceding
month whose figure was revised up from -0.05.
NSE-NIFTY witnessed sharp decline in the initial trade and later spent entire
session oscillating in narrow range. Finally after registering high of 9,168
and low of 9,116 levels closed the day at 9,127 mark with loss of 33 points.
* NSE Cash
segment has reported turnover of Rs22,650crore as compared to Rs31,890 crore
earlier.Overall market breadth turned negative, where 787 stocks advanced
against 860 declined stocks.
trend was observed across all the sectoral indices during the day, where none
of the sectoral indices reported gain of more than 0.5%. However, IT index
emerged as a top loser with the decrease of 1.1%.
slipped to three day low as index failed to continue prior daily up-trend. As
mentioned earlier, our technical view will remain positive on NIFTY, but some
decline or sideways movement cannot be ruled out before index resumes the
uptrend and records fresh high, as (i) negative market breadth, (ii) overbought
indicators and (iii) lack of positive trigger in market are signaling the same.
On the lower side, NIFTY will find immediate support around break-out line
(i.e. placed around 9,120 level) and in case of further fall, psychological
mark-9,000 will continue to work as key support level. On the higher side,
index major resistance observed around 9,200 and then at 9,500 levels.
As for the
day, support is placed at around 9,050 and then at 9,000 levels, while
resistance is observed at 9,170 and then around at 9,220 levels.