Nifty 9084/Sensex 29398/ Bank Nifty 21157
25 Advances / 25 Declines/ 1 Unchanged
Indian Benchmarks end with modest cut ahead of Fed outcome
Indian equity benchmarks ended the lacklustre day of trade with marginal losses, as traders opted to book some of their profits after yesterday's rally. Frontline gauges swung between green and red throughout the day, as traders remained cautious ahead of the US Federal Reserve's rate decision. Traders remained on side-lines as the likelihood of a repo rate cut in April 2017 remained subdued. Those hoping that the Reserve Bank of India (RBI) would slash interest rates going ahead may just have to wait further as the inflation may have come back to haunt the economy. Higher food, fuel, non-fuel commodities and power prices, and playing out of base effect in February had led to both Wholesale Price Index (WPI) and Consumer Price Index (CPI) or retail inflation soaring northwards to 6.55% and 3.65%, respectively. The WPI inflation was highest in 39 months, while the retail inflation was at a 4-month high.
However, losses remained capped as Moody’s Investors Service said that BJP’s thumping victory in Uttar Pradesh and substantial gains made in other states will facilitate reforms as the ruling party inches closer to a majority in Upper House. It added that the 2017 state election results in India demonstrate broad-based popular support for the Indian government’s policy agenda and will facilitate the implementation of further reforms, a credit positive for the sovereign.
On the global front, European markets were trading in green ahead of a Federal Reserve rate-setting meeting in the U.S. However, Asian counters ended mostly in red as investors remained focused on what the Federal Reserve will say about tightening monetary policy during the rest of the year with markets already pricing in an immediate rise in US interest rates.
Back home, sharp rally in rupee hurt the shares of software companies. The rupee climbed at 65.40 per dollar on Wednesday, it’s strongest since November 2015, compared with its previous close of 65.80. The PSU oil marketing companies viz. HPCL, BPCL and IOC edged lower despite the international crude oil prices slid to the lowest since late November after OPEC reported a rise in global crude inventories and raised its forecast of production in 2017 from outside the group.
Fed raises rates as job gains, firming inflation stoke confidence
The U.S. Federal Reserve raised interest rates on Wednesday for the second time in three months, a move spurred by steady economic growth, strong job gains and confidence that inflation is rising to the central bank's target.
The decision to lift the target overnight interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent marked one of the Fed's most convincing steps yet in the effort to return monetary policy to a more normal footing.
However, the Fed's policy-setting committee did not flag any plan to accelerate the pace of monetary tightening. Although inflation is "close" to the Fed's 2 percent target, it noted that goal was "symmetric," indicating a possible willingness to allow prices to rise at a slightly faster pace.
Further rate increases would only be "gradual," the Fed said in its policy statement, with officials sticking to their outlook for two more rate hikes this year and three more in 2018. The Fed lifted rates once in 2016.
Business investment "appears to have firmed somewhat," the Fed said in language that reflected a stronger sense of the economy's momentum.
Fresh economic forecasts released with the statement showed little change from those of the December policy meeting and gave little indication the Fed has a clear view of how Trump administration policies may impact the economy in 2017 and beyond.
"With gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace," the Fed said, maintaining language it has used in previous statements.
The Fed's projections showed the economy growing by 2.1 percent in 2017, unchanged from the December forecast. The median estimate of the long-run interest rate, where monetary policy would be judged as having a neutral effect on the economy, held steady at 3.0 percent.
FII’s Activity 15-March-17
The FIIs as per Wednesday’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 10237.09 crore against gross selling of Rs 5927.60 crore. Thus, FIIs stood as net buyers of Rs 4309.49 crore in equities.
In the debt segment, the gross purchase was of Rs 1144.60 crore with gross sales of Rs 1153.81 crore. Thus, FIIs stood as net sellers of Rs 9.21 crore in debt.
Now what to expect??
Nifty Future Levels
Support at 9050 and Resistance at 9218---9248.
Looks positive and could touch its Resistance level of 9218---9248. Further upside rally will see only close above 9248 mark else could touch its support level of 9050 again.
Fresh selling can be initiated below 9050 mark.
Today's Top Pick
Havells
Support at 428 and Resistance at 435.50.
Break and sustain above 435.50 will take it to 442--445 and then to 450+ mark in days to come, else could touch its support level of 428 again.
Looks weak only if closes below 428 mark
More will update soon!!
