Nifty 8945/Sensex 28984/ Bank Nifty 20783
23 Advances / 28 Declines/ 0 Unchanged
Indian benchmarks snap two days losing streak; Nifty regains 8,900 mark
Snapping two days losing streak, Indian equity benchmarks staged an enthusiastic performance on Wednesday, by rallying over half a percent and breaking the important psychological levels in their northward journey as a much stronger-than-expected quarterly economic growth lifted sentiments. India’s Gross domestic product (GDP) for the third quarter (Q3) of financial year 2016-17 (FY17) grew at 7%, allaying fears of any major effect of demonetisation though it was the lowest expansion in four quarters. The Q3 numbers not only made India the fastest-growing large economy in the world but also helped the Central Statistics Office (CSO) retain its earlier projection (in first advance estimates) for full-year GDP growth at 7.1% in the second advance estimates released on Tuesday. The market sentiments were also underpinned by a private survey indicating that Indian manufacturing sector expanded marginally in February as a rebound in export demand contributed to a stronger expansion of total new orders.
The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) -- an indicator of manufacturing activity -- increased to 50.7 in February, up from 50.4 in January, as output and order books rose at accelerated rates. However, in the early deals there was some cautiousness as CSO has actually forecast a greater slide in gross value added (GVA), suggesting that deceleration is sharper than what the headline GDP growth numbers suggest. The CSO data shows that growth in GVA, which is GDP minus net taxes, will slow down to 6.7% in 2016-17 or 1.1% lower than 7.8% GVA growth in 2015-16. GVA serves as a more realistic proxy to measure changes in the aggregate value of goods and services produced in the economy. The demonetisation effect and the resultant slowdown in household spending and corporate investment may well be hiding in the steeper fall in GVA growth estimates compared to GDP. Furthermore, the growth of eight core sectors has decelerated to 3.4% in January compared to 5.7% in the same month last year, thanks to plummeting output in three key segments - cement, fertilisers and refinery products.
Meanwhile, information technology (IT) stocks surged after the US President Donald Trump’s first speech to US congress was seen more restrained than the harsh rhetoric seen during his pre-election speeches. The speech did not have any comment on visa issues that may hit domestic IT firms. Instead, the US President said the US immigration should be based on a merit-based system, rather than relying on lower-skilled immigrants.
On the global front, Asian markets ended mostly in green on Wednesday, with Japanese shares leading gains, as exporters received a boost from a relatively weaker yen and the Nikkei survey showed the health of Japan's manufacturing sector improved at a pace not seen in nearly three years during February. Chinese shares edged higher after reports showed activity in China's manufacturing sector expanded faster than expected in February. While the official PMI rose to a three-month high of 51.6 in the month, the non-manufacturing PMI, which is a better indicator of domestic demand, eased slightly to 54.2 from 54.6 in the previous month. Meanwhile, European shares gained in early trade, with results driving specific stock moves, while basic resources were the top sector performers after U.S. President Donald Trump pledged $1 trillion of infrastructure spending in his first speech to Congress.
Back home, after getting a strong start, the local benchmarks maintain their early gains throughout the session and ended the day on optimistic note.
FII’s Activity 01-Mar-17
The FIIs as per Tuesday’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 5185.67 crore against gross selling of Rs 5331.00 crore. Thus, FIIs stood as net sellers of Rs 145.33 crore in equities.
In the debt segment, the gross purchase was of Rs 1014.89 crore with gross sales of Rs 355.89 crore. Thus, FIIs stood as net buyers of Rs 659.00 crore in debt.
Now what to expect next??
Nifty Levels
Support at 8870 and Resistance at 8980—9050
Nifty looks positive and could touch its resistance level of 8980---9050, further upside rally will on close above 9050, else could touch its support level of 8870.
Looks weak below 8870.00
Bank Nifty Levels
Support at 20600 and resistance at 21025
Bank Nifty too looks positive can could touch its resistance level of 21025, further upside rally will above 21025, else could touch its support level of 20600 mark.
Looks weak only below 20600 mark.
Trade in a range with levels only.
Today's Top Pick
Tata Steel
Yesterday we have seen sharp upside move in Tata Steel given a fresh upside breakout.
Now what to expect??
Above 506 will see rally till 512--520 and then to 530+
Support and stop loss below 498.00
More will update soon!!
