Nifty 9265/ Sensex 29,974/ Bank Nifty 21652
28 Advances / 23 Declines/ 0 Unchanged
Indian benchmarks settle at record closing highs ahead of RBI policy review
Indian stock markets sustained the joy of closing in the positive territory for the second successive session on Wednesday after the frontline equity gained around quarter percent and settled at record closing highs. Sentiments got some support after government exceeded the tax collection estimates for 2016-17 fiscal at Rs 17.10 lakh crore, indicating that it should be able to meet the fiscal deficit target for the year. While direct tax mop-up during the April-March period grew 14.2% at Rs 8.47 lakh crore, indirect tax kitty swelled by 22% over last year to Rs 8.63 lakh crore. Some support also came with the report that department of Industrial Policy and Promotion (DIPP) and global think-tank OECD are jointly organising a seminar in Delhi to assess India's FDI regime and find ways to further improve the ease of doing business. The international seminar will also analyse the business climate in the country. However, many market participants remained on the side lines and refrained from any buying activity ahead of the Reserve Bank of India's monetary policy statement due tomorrow. Rising interest rate in the US provides sufficient indication that benchmark policy rate of RBI is not going to go down but may increase in the future depending on domestic and external factors. However, investors are expecting the RBI to announce measures to absorb liquidity that has accumulated post demonetisation. Central bank Governor Urjit Patel in his last policy review on February 8 had kept the key interest rate on hold at 6.25%. Meanwhile, IT stocks came under pressure on the report that Trump administration has issued a stern warning to companies not to discriminate against American workers by misusing the H-1B work visas programme. In a fresh blow to Indian software professionals, the Trump administration has also moved to bar entry-level programmers from the H-1B visa programme.
On the global front, Asian equity markets ended mostly higher on Wednesday even as underlying sentiment remained cautious over North Korea's latest ballistic missile test, which landed in the Sea of Japan. Investors also remained cautious ahead of some key events this week, including the release of minutes of the latest Federal Reserve meeting on Wednesday, the US-China summit starting Thursday, and the closely-watched monthly US jobs report on Friday. Chinese shares edged higher as investors cheered Beijing's decision to launch a new economic zone in Hebei province, sending shares of several related firms surging by the daily limit of 10 percent. Meanwhile, European stocks are booking modest gains in early trading as mining and energy shares boost benchmarks in London, offsetting a cautious tone in broader financial markets ahead of this week's summit meeting between President Donald Trump of the United States and Xi Jinping of China.
Back home, the BSE Sensex breached 30,000-mark and the NSE Nifty surged above 9,250-mark in the opening trade, but failed to sustain it and slipped into the negative territory in later part of the trade. Thereafter, the benchmarks traded in tight range throughout the session and ended moderately higher. Finally, the NSE's 50-share broadly followed index Nifty, got buttressed by over quarter percent to settle above the crucial 9,250 support level, while Bombay Stock Exchange's Sensitive Index-Sensex accumulated over fifty points and closed above the psychological 29,950 mark. Further, the broader markets succeed to outperform their larger peers as the BSE's midcap gained 0.46% and small cap index jumped 1.12%. The market breadth remained optimistic, as there were 1998 shares on the gaining side against 932 shares on the losing side, while 142 shares remained unchanged.
Most Fed policymakers see change to balance sheet policy 'later this year': minutes
Most Federal Reserve policymakers think the central bank should take steps to begin trimming its $4.5 trillion balance sheet later this year as long as the economic data holds up, minutes from their last meeting showed. The minutes released on Wednesday of the March 14-15 policy discussion, at which the Fed voted 9-1 to raise interest rates, also showed that the rate-setting committee had a broad discussion about whether to phase out or halt reinvestments all at once.
"Provided that the economy continued to perform about as expected, most participants anticipated that gradual increases in the federal funds rate would continue and judged that a change to the Committee's reinvestment policy would likely be appropriate later this year," the Fed said in the minutes. Fed policymakers have previously indicated that any plan to shrink its portfolio would let the bonds naturally roll off, by not reinvesting them when they mature, once its interest rate hikes were "well under way."
The Fed's lifted its benchmark interest rate in March to a target range of between 0.75 and 1 percent, its second hike in three months, and signalled it remained on track to lift rates twice more this year.In the minutes, almost all policymakers agreed that the timing of a change in balance sheet policy would depend on economic and financial conditions and generally preferred to taper or stop investments in both Treasury and mortgage-backed bonds.
An approach that phased out reinvestments was seen as less likely to trigger financial market volatility while doing so all at once "was generally viewed as easier to communicate while allowing for somewhat swifter normalization of the size of the balance sheet. “What they all agreed on was that shrinking the balance sheet should be gradual and predictable and nearly all said that any altering of the policy "should be communicated...well in advance of an actual change."
FII’s Activity 5th-April-17
The FIIs as per Thursday’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 9353.32 crore against gross selling of Rs 8673.26 crore. Thus, FIIs stood as net buyers of Rs 680.06 crore in equities.
In the debt segment, the gross purchase was of Rs 3013.44 crore with gross sales of Rs 1980.54 crore. Thus, FIIs stood as net buyers of Rs 1032.90 crore in debt.
Now what to expect next??
Nifty Levels
Support at 9084 and Resistance at 9330--9380.
Above 9285 will see upside rally till 9330---9380 mark.
Trade in a range with levels only.
Bank Nifty Levels
Support at 21400 and resistance at 21700
Trend Looks positive and could touch its resistance level of 21700. Close above 21700 will see further upside rally in it else could touch its support level of 21400 again.
More will update soon!!
