Nifty will be headed higher if it closes above 7,100
We had mentioned in Monday’s closing report that Nifty, Sensex may try to rise and that while the trend is down, Nifty can rally if it closes above 7,050. The major indices of the Indian markets advanced sharply. The trends of the major indices during Tuesday’s trading are given in the table below:
Expectations of a rate cut, coupled with budgetary announcements and positive Asian cues, buoyed the Indian equity markets during the late-afternoon trade session on Tuesday. The BSE market breadth was heavily tilted in favour of bulls -- with 1,903 advances and 573 declines. Initially, the key indices of the Indian equity markets opened on a positive note, in-sync with their Asian peers and expectations of a future rate cut. Short-coverings were triggered by heightened chances of a future rate cut by the Reserve Bank of India (RBI). This pushed prices higher, as investors expect the Union Budget's fiscal prudence measures will give room to the RBI to further ease its monetary policy. Presenting the Union Budget, Finance Minister Arun Jaitley on Monday announced that the government will adhere to a 3.9% fiscal deficit target. He also set a 3.5% target for the next fiscal.
Buying in large caps like ITC, ICICI Bank, Hero MotoCorp and Maruti Suzuki lifted equity markets higher. Even positive macro-data that showed acceleration in India's manufacturing activity in February supported the equity markets upward movement. The monthly Nikkei's Purchasing Managers Index (PMI) data reported a 51.1 uptrend in February. An index reading above 50 indicates an overall increase on the index. Besides, investors' confidence was restored after the central government announced increase in capital expenditure on rural sector, infrastructure development, crop insurance, agricultural credit, skill enhancement and start-up initiative. In addition, bullish crude oil prices which rose by 1.2% to $34 per barrel, led investors from chasing stock prices higher. Moreover, a strengthening rupee cheered investors’ sentiments. It opened at 68.27 to a US dollar from its previous close of 68.42 to a greenback.
The industrial output index for India's eight core industries registered growth in January, pushed up by higher coal, refinery products, fertilisers, cement and electricity output, an official statement said. The index representing major infrastructure sectors had also recorded growth in December 2015. The index showed a rise of 2.9% in January 2016 on a month-on-month basis, compared to the 0.9% marginal growth in December 2015, official data showed on Monday. The core industries fell by 1.3% in November last year. The select factory output index for January is more than the growth of 2.3% achieved during the corresponding month in 2015, a commerce ministry release said. This index comprises 38% of the total weightage of items included in the Index of Industrial Production (IIP). Its cumulative growth from April to January 2015-16 stood at 2%, as compared to 5.3% during the corresponding period of 2014-15. Out of the eight core industries, coal and cement reported healthy output numbers. However, production of oil, natural gas, and steel dipped in the period under review. Electricity recorded 6% change in January 2016 as compared with 3.3% in January 2015. Its cumulative index during April to December 2015-16 rose by 7.6% over the corresponding period of previous year. Distilling of refinery products (which is the third most important component as per weightage) increased by 4.8% in January. Extraction of crude oil, which has a 5.21% weightage in IIP, fell by 4.6% during the month under review in comparison with 2.3% decline of January 2015. Coal mining, with a 4.38% weightage, increased by 9.1%. The sub-index for natural gas output, with a weightage of 1.71%, slipped by 15.3% in the month under consideration. The fertilisers manufacturing with a weightage of only 1.25% rose by 6.2%. Steel declined by 2.8% in January 2016.
Two-wheeler-maker Eicher Motors Ltd. on Tuesday said it closed last month with 63% growth in volume. In a statement the company said it sold 49,156 units last month as against 30,240 units sold during February 2015. Eicher shares closed at Rs19,183.00, up 1.53% on the BSE.
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: