Nifty 8792/Sensex 28339/ Bank Nifty 20258
21 Advances / 30 Declines/ 0 Unchanged
Indian benchmarks end nearly flat ahead of Janet Yellen's testimony
Indian frontline equity indices prolonged the lull for yet another day and finished the session on a dull note, marginally below the neutral line, as investors at large remained reluctant to build long positions ahead of Fed Chairwoman Janet Yellen's semiannual testimony before Congress. The session largely remained characterized by choppiness as the aimless indices moved in tight-range throughout the day. Sentiments tuned dismal after Wholesale inflation shot up to a 30-month high of 5.25% in January as rising global crude oil prices spiked domestic fuel cost, even as food prices moderated. The overall inflation index of the fuel and power segment surged to 18.44% from 8.65% in the previous month.
However, Retail inflation, measured in terms of Consumer Price Index (CPI), fell to a 5 year low of 3.17% in January mainly on account of declining prices of food items including vegetables and pulses. Although micro-indicators of inflation showed mixed picture, many experts believes that significant fall in CPI base inflation is result of demonetization and it will not maintain its current range, while WPI base inflation will increase if the crude oil prices continued to rise. Further, trading sentiments remained subdued with a private report that India’s economic growth is likely to remain muted in the first quarter of this calendar year with the GDP likely to grow at 5.7% in the January-March period amid subdued activity.
However, investor got some comfort with Finance Minister Arun Jaitley’s statement that the Modi government's emphasis is on bold decision making and a clean economy with business friendly environment, the returns of which can be spent on the poor.
On the global front, Asian markets ended mostly lower on Tuesday as investors turned jittery ahead of testimony by the head of the Federal Reserve, which could highlight the likelihood of two or more U.S. interest rate hikes this year. Japanese markets edged lower after the yen strengthened on news that Trump's embattled national security adviser Michael Flynn has resigned over revelations that he had misled Vice President Mike Pence and other officials about his contacts with Russia.
Furthermore, Chinese market ended flat after data showed China's consumer price inflation accelerated to a 32-month high in January and producer prices climbed at the fastest pace since 2011, reinforcing market expectations the central bank will continue with monetary-tightening policies. Meanwhile, European markets declined for the first time in six sessions, moving slightly lower after economic growth data from Germany and the eurozone missed forecasts.
Back home, after getting positive start, the local benchmarks slipped into negative territory and continued their lackluster performance throughout the session and ended with moderate cut.
Yellen Sees More Rate Hikes Ahead If Economy Stays on Course
Federal Reserve Chair Janet Yellen said more interest-rate increases will be appropriate if the U.S. economy meets the central bank’s outlook of gradually rising inflation and tightening labor markets.
“At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” she told the Senate Banking Committee in prepared remarks Tuesday.
Yellen’s semiannual report on monetary policy is her first since Donald Trump became president vowing to boost U.S. growth, which could push the Federal Open Market Committee to pick up the pace of rate hikes if such steps fan higher inflation. She reiterated that falling behind on inflation could harm to the economy and possible cut short the expansion.
“Waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession,” she added.
FII Activity (14th Feb 2017)
The FIIs as per Tuesday’s data were net buyers in equity and debt segments both, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 3893.35 crore against gross selling of Rs 3575.50 crore. Thus, FIIs stood as net buyers of Rs 317.85 crore in equities.
In the debt segment, the gross purchase was of Rs 990.26 crore with gross sales of Rs 221.52 crore. Thus, FIIs stood as net buyers of Rs 768.74 crore in debt.
Key Results
Asahi India Glass Ltd
Grasim Industries Ltd
Nestle India Ltd
Now what to expect next??
Nifty Future Levels
Support 8720 and resistance at 8850.
Trading in range, either side breakout with volume will decide further.
Wait for confirmation
Bank Nifty Future Levels
Support at 19900 and resistance at 20650.
Trend looks positive and could touch its resistance level of 20650, further upside rally will see on close above 20650 else could touch its support level of 19900
Looks weak only below 19900
More will update soon!!
