Nifty 8897/Sensex 28832/ Bank Nifty 20495
24 Advances / 27 Declines/ 0 Unchanged
Indian benchmarks pare losses, end flat as Fed rate hike looms
Indian benchmark indices trimmed most of their losses, but failed to end the session on positive note, as traders remained cautious ahead of a speech by U.S. Federal Reserve Chair Janet Yellen, with expectations growing the Fed would raise interest rates soon. Several Fed officials have recently voiced their need for higher rates, which has seen the implied probability of a move this month shoot higher. On the domestic front, sentiments got hit by the GST Council deciding to peg the peak goods and services tax (GST) rate at 40% in the legislation instead of 28%, giving it the flexibility to raise rates without having to reach out to Parliament. Though, 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 for the moment.
However, investors were seen covering lot of short positions in late afternoon trades after some pessimism got petered out on the back of strong services PMI data. India's dominant services industry returned to growth in February for the first time in four months, as demand slowly recovers after the government's cash crackdown late last year.
The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction. Some support also came with the report that the Competition Commission of India is assessing regulations across sectors in efforts to weed out ‘obsolete regulatory restrictions’ and improve the ease of doing business.
On the global front, Asian markets concluded the week on pessimistic note as investors turned jittery after Wall Street retraced from record highs overnight, amid renewed expectations of an interest rate hike by the Federal Reserve later this month. Japanese market fell as the yen strengthened after four days of losses and a raft of data painted a mixed picture of the world's third-largest economy. In the latest sign of an uptick in inflation around the world, Japan's core consumer prices rose for the first time in over a year in January.
The jobless rate dropped to 3.0 percent from 3.1 percent in December, while household spending fell for the 11th straight month, indicating the country's economic recovery remains fragile. The Markit/Nikkei Japan services PMI slipped to 51.3 in February from 51.9 in January. Further, the US dollar index, a measure of the currency against a basket of global peers, was down 0.1% on Friday, after a rise of more than 1% over the previous two sessions. Meanwhile, European stocks edged lower, with caution setting in as investors waited to hear what Federal Reserve Chairwoman Janet Yellen may say about a possible interest rate increase.
Back home, after trading on subdued note for most part of the session, the local benchmarks regained their strength in final hour of trade after India’s dominant services industry returned to growth in February for the first time in four months.
FII Activity (03 March 2017)
The FIIs as per Friday’s data were net buyers in equity segment, while they were net sellers in debt segment, according to data released by the NSDL.
In equity segment, the gross buying was of Rs 5034.59 crore against gross selling of Rs 5010.38 crore. Thus, FIIs stood as net buyers of Rs 24.21 crore in equities.
In the debt segment, the gross purchase was of Rs 336.40 crore with gross sales of Rs 1109.86 crore. Thus, FIIs stood as net sellers of Rs 773.46 crore in debt.
Now what to expect next??
Nifty Future Levels
Nifty almost took support of 8870 and bounced back sharply.
Now what to expect.??
Looks positive and could touch its resistance level of 8980---9050. Further upside rally will see on close above 9050 else could touch its support level of 8870 again.
Fresh selling can be initiated below 8870 on closing basis.
More will update during market hours
Today's Top Pick
Ambuja Cement
Ambuja Cement... Support at 224 and resistance at 230.
Break and close below 224 will see sharp downside panic till 212---208 mark in days to come.
Hurdle and stop loss above 230 on closing basis.
More will update soon!!
