Nifty 8899/Sensex 28839/ Bank Nifty 20560.00
16 Advances / 35 Declines/ 0 Unchanged
Indian benchmarks lose steam after hitting fresh 52-week high
Indian equity benchmarks showed a volte-face on Thursday as what started on a promising note ended as a dismal show. Investors squared off position in the dying hours of trade as sentiments turned pessimistic on the report that GST Council has proposed to raise the peak tax rate to 20%, from the current 14%, in the model goods and services tax Bill to preclude the requirement of approaching Parliament for any change in rates in future.
The change in the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28 percent agreed upon last year, but is only a provision being built into the model law to take care of contingencies in future. Furthermore, traders remained cautious as Non-food credit, comprising loans given by banks to agriculture and allied activities, industry, services and personal segments, grew at a slower clip of 3.5% year-on-year in January 2017 as against 9.8% in the year-ago period. The slow growth in non-food credit shows that demand in the economy has not recovered after taking a beating during the 50-day demonetisation period between November 9 and December 30, 2016. Moreover, credit to agriculture and allied activities increased at a slower pace of 8.1% in January 2017, compared with a robust increase of 13.4% in January 2016. Adding anxiety among market participants, Moody's kept India's gross domestic product (GDP) forecast for FY17 at 6.9% and expects the full impact of demonetisation to reflect in the fourth quarter numbers. The ratings agency expects Q4 GDP to moderate to 6.4%. However, losses remained capped with the report that the government is expected to soon announce relaxations in the foreign direct investment (FDI) policy in certain sectors, including single brand retail. The further liberalisation in the FDI policy is aimed at providing better business environment by removing impediments. The government last year relaxed FDI norms in over a dozen sectors, including defence, civil aviation, construction and development, private security agencies, real estate and news broadcasting.
On the global front, Asian equity markets ended mostly higher on Thursday, as traders get some comfort from record performances in New York after upbeat US economic data and Donald Trump's conciliatory speech to Congress. The US president's much-anticipated address on Tuesday, while lacking details, was broadly welcomed as he promised a trillion-dollar infrastructure splurge and tax cuts -- music to bullish investors' ears. Further, Japan's Nikkei share average hit a 14-month high as the dollar gained against the yen on rising expectations the US Federal Reserve will hike interest rates in March. However, Chinese shares ended lower after a string of hawkish remarks from Federal Reserve officials stirred concerns that an interest rate hike in the US could trigger fresh capital outflows and hurt domestic liquidity. Meanwhile, European shares steadied early trade, pausing after a strong rally in the previous session.
Back home, after getting a firm start, the local benchmarks traded in a tight range for most part of the session, but witnessed sharp selling pressure in final four of trader, which dragged the indices to-day’s low point by close of trade.
FII’s Activity 02-March-17
The FIIs as per Thursday’s data were net sellers in equity segment, while they were net buyers in debt segment, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 5236.96 crore against gross selling of Rs 5334.17 crore. Thus, FIIs stood as net sellers of Rs 97.21 crore in equities.
In the debt segment, the gross purchase was of Rs 513.72 crore with gross sales of Rs 303.57 crore. Thus, FIIs stood as net buyers of Rs 210.15 crore in debt.
Now what to expect next??
Nifty Levels
Nifty unable to breach its resistance level of 8980—9050 and crashed vertically.
Now what to expect???
Support at 8870 and Resistance at 8980—9050
Break and sustain below 8870 will take it to 8830—8780 and then to 8720 mark, else could touch its resistance level of 8980—9050 again.
Further upside rally will see only above 9050
Bank Nifty Levels
Yesterday we have sharp downside panic in Bank nifty.
Now what expect??
Support at 20600 and resistance at 21025
Break and sustain below 20600 will take to 20400---20250 mark else it could test its resistance level of 21025 again.
Looks positive above 21025 only.
More will update soon!!
