Nifty, Sensex may pause for breath – Weekly closing report
We had mentioned in last week’s closing report that Nifty, Sensex continued to be range-bound. The major indices of the Indian stock markets rallied during the week and closed with a gain of over 2% during the week. The trends of the major indices in the course of the week’s trading are given in the table below:
 
 
Indian equity markets surged on Tuesday (the market was closed on Monday on account of Holi), tracking positive state election results for ruling party at the Centre. Bearish USD/INR futures prices also supported the firm sentiments of the markets. Almost all sector stocks traded with firm sentiments tracking over all buying activities in Indian equity markets. On the NSE, there were 944 advances, 523 declines and 75 unchanged. On the BSE, there were 1,703 advances, 1,124 declines and 218 unchanged.
 
India's annual rate of inflation based on wholesale prices rose to 6.55% in February 2017 from 5.25% in the previous month, official data showed on Tuesday. According to the Wholesale Price Index (WPI) data released by the Commerce and Industry Ministry, the annual inflation rate was (-)0.85%  in February 2016. A rise in inflation could divert some fixed income investments into the stock markets and show higher trading volumes over a period of time.
 
US stocks wavered and ended mixed, as Wall Street mainly awaited a possible interest rate hike from the US Federal Reserve on Wednesday. Traders generally anticipated the Federal Open Market Committee to raise interest rates at the conclusion of its two-day monetary policy meeting later this week. Market expectations for a March rate hike were around 95.2%, according to the CME Group's FedWatch tool. A rise in interest rates could divert some funds of foreign institutional investors from India to developed countries.
 
Selling pressure in IT (information technology) and Teck (technology, media and entertainment) stocks, coupled with disappointing macro-economic data pulled the Indian equity markets lower on Wednesday. Besides, investors were cautious ahead of the US Federal Open Market Committee's meet later in the evening on whether or not to raise interest rates. However, the rupee was strong. On the NSE, there were 790 advances, 661 declines and 63 unchanged. On the BSE, there were 1,426 advances, 1,384 declines and 187 unchanged.
 
Asia's oldest bourse BSE on Tuesday launched futures on S&P BSE Sensex 50 index which will help investors to achieve portfolio diversification. "The market participants would be able to take a long-term view on the underlying. Introduction of additional indices will also lead to increased participation in the index futures market," it said in a statement. The index is designed to measure the performance of the top 50 largest and liquid stocks in the exchange's Large and Mid Cap by float-adjusted market capitalisation. Further, index futures contracts will lead to better price discovery and will be useful in hedging and risk management tools. According to the exchange, it will also take market towards a multi-product environment. "The index is diversified index as it represents each key economic sector identified by bourse's sector model covering approximately 53.9% of total market capitalisation of the exchange listed companies as of October 30, 2016," it added.
 
Positive global cues, a strong rupee and healthy buying in metals, capital goods and consumer durables stocks, brought a cheer to the Indian equity markets on Thursday. The key indices closed with gains of more half a per cent each, well absorbing the 25 basis points (bps) rate hike by the US Federal Reserve on Wednesday for the second time in three months.  The Indian economy is strong enough to absorb the impact of the US Federal Reserve's interest rate hike, the government said on Thursday. 
 
On Friday, the major indices were range-bound and closed with marginal losses over Thursday’s close. As many as 29 lakh debit cards, which were connected to Hitachi's switch, came under malware attack last year, Parliament was informed on Friday. "As reported by commercial banks, 29 lakh cards used at ATMs that were connected to switch of Hitachi were subjected to malware attack," Minister of State for Finance Santosh Kumar Gangwar said in a written reply in the Lok Sabha. However, the successful attempts of misuse of compromised cards reported to the Reserve Bank of India (RBI) by banks was only 3,291, he said. The S & P BSE Bankex closed at 24,151.13, down 0.46%. 
 
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  • Nifty, Sensex to head higher – Thursday closing report
    We had mentioned in Wednesday’s closing report that Nifty, Sensex remained firm. The major indices of the Indian stock markets were range-bound on Thursday and closed with small gains over Wednesday’s close. The trends of the major indices in the course of Thursday’s trading are given in the table below:
     
     
    Positive global cues, a strong rupee and healthy buying in metals, capital goods and consumer durables stocks, brought a cheer to the Indian equity markets on Thursday. The key indices closed with gains of more half a per cent each, well absorbing the 25 basis points (bps) rate hike by the US Federal Reserve on Wednesday for the second time in three months.  
     
    The Indian economy is strong enough to absorb the impact of the US Federal Reserve's interest rate hike, the government said on Thursday. "Indian markets well placed to absorb US Fed rate hike. Gradual approach in future increases augurs well for emerging markets," India's Economic Affairs Secretary Shaktikanta Das said in a tweet, a day after the US Fed hiked lending rates for the third time since the 2008 global financial crisis, with the American job market strengthening and the control of inflation rising toward its target. The US Fed on Wednesday raised its key interest rate by 25 basis points (bps), making its third rate hike since the financial crisis and the second time in three months. In December 2016, the US Fed increased its benchmark rate by 25 bps in the first rate hike in 2016 and just the second in a decade. The first was in December 2015. "In view of realised and expected labour market conditions and inflation, the central bank decided to raise the target range for the federal funds rate by 25 basis points to 0.75%-1.0%," the US Fed's policy-making committee said in a statement released after its two-day meeting in Washington. The committee did not indicate any plans to accelerate the pace of monetary tightening. Further rate increases would only be "gradual", it said. Indian equity markets reacted positively and the key indices opened higher on Thursday.  
     
    Commenting on the development, State Bank of India's Chief Economic Adviser Soumya Kanti Ghosh said its impact on India "will be muted partly because the results of UP elections have altered the view of country risk for India beyond 2019."  "Though the currency can appreciate in the short term, rupee is expected to settle at Rs 66.5-67.5 per dollar at the end of 2017. However, this view is subjected to position taken by other central banks in response to the US Fed rate hike."  "The fallout of present rate hike is already divergent with Bank of Japan maintaining a status quo and Peoples Bank of China indicating a tightening stance," Ghosh said in a report.  Based on the analysis, currency markets are expected to be stable and foreign institutional investors are not likely to either flood the Indian market with investments or withdraw in a hurry.
     
    India's exports revived for the sixth straight month, as the country's merchandise shipments overseas reported a double-digit growth during February, official data showed on Wednesday. According to data released by the Ministry of Commerce and Industry, the exports grew by 17.48% to $24.49 billion from $20.84 billion worth of merchandise shipped out during February 2016. However, the country's imports during the month under review increased by 21.76% to $33.38 billion from $27.41 billion worth of merchandise which were shipped out in during the corresponding month of last year. Consequently, the trade deficit during February reduced to $8.89 billion from $9.84 billion reported for the month before. On a year-on-year (YoY) basis, the trade deficit stood at $6.57 billion during same month of 2016. "The growth in exports is positive for USA (5.61%), EU (1.68%) and Japan (10.87%) but China has exhibited negative growth of (-6.20%) for December 2016 over the corresponding period of previous year as per latest WTO statistics," said a Commerce Ministry release. Cumulatively for the April-February period, exports rose marginally by 2.52% in dollar terms at $245.4 billion, as against exports of $239.3 billion over the same period last year. "Non-petroleum and non-Gems and Jewellery exports in February 2017 were valued at $18.01 billion against $14.99 billion in February 2016, an increase of 20.15%," a statement here said. With the Indian economy doing well, the stock markets are expected to be bullish.
     
    Macro-economic factors are gaining importance in our stock markets and hence fund managers of mutual funds and foreign institutional investors are likely to be the decision makers on large scale investments.
     
    The top gainers and top losers of the major indices are given in the table below:
     
     
    The closing values of the major Asian indices are given in the table below:
     
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