INDIAN EQUITY MARKET OUTLOOK - 25 FEB 2016

INDIAN BENCHMARKS are likely to witness cautious opening as the global cues look mixed with SGX Nifty trading 10.50 points lower. Indian equity benchmarks are set to open little changed on Thursday as traders resort to a cautious stance ahead of the Railway Budget today with Railway Minister Suresh Prabhu likely to unveil a series of new rail projects, which may come with a hike in passenger fares as the exchequer faces an additional burden of Rs32,000 crore due to higher salaries and pensions, as imposed by the seventh pay commission. Volatility at the local bourses may remain high as traders roll over their positions ahead of the February futures & options (F&O) contract expiry today. The CNX Nifty Index futures for February delivery were trading down by 0.04 per cent or by 2.5 points at 7,022 at 10:21 am Singapore time, signaling that the Sensex may open tad lower today. Traders are expected to remain jittery ahead of Monday’s Union Budget with Finance Minister Arun Jaitley walking on a tight rope as he grants wage and pension hikes, increases public expenditure and assures that the centre’s fiscal deficit is reigned in. India's stock markets ended lower on Wednesday, posting the second drop after four sessions of gains, as investors turned jittery ahead of next week's Union Budget, with a reversal in oil prices putting further pressure on the market. The S&P BSE Sensex and CNX Nifty ended 1.37%-1.28% lower each. On Wednesday, February 24, 2016, 30-share BSE SENSEX closed at 23088.93, down by 321.25 points, or by 1.37 per cent, and the NSE Nifty ended at 7018.7, down by 90.85 points, or by 1.28 per cent.

Headlines for the day:

• ·  Emami plans to ramp-up cement and solar biz in FY17.
• ·  Kridhan Infra arm bags Rs247 crore order in Singapore.
• ·  IVRCL’s lenders to convert loans into 51% equity holding.

Global Indices:

·  Asian stocks were trading mixed on Thursday with concerns over the outlook for the Chinese economy taking toll on China’s Shanghai Composite that tumbled over 1 per cent while Hang Seng fell too, but Japan’s Nikkei 225 rallied driven by gains in energy shares as crude rallied while a report that Japan is considering an extra budget of 5 trillion yen also cheered traders.

·  Wall Street advanced on Wednesday as oil steadied at around USD 32 per barrel, helping US stocks to overcome their biggest dip in two weeks, even as concerns remained over the health of the world’s biggest economy.

·  Sales of US new home sales fell by 9.2 per cent to a 494,000 annualized pace in January while services fell into contraction for the first time since October 2013 with the PMI declining to 49.8 in February from 53.2 in January.

·  European equities fell for a second straight session to a one-week low on Wednesday, with further selling pressure on commodities-related shares as prices of copper and crude oil slipped.

Trend in FII flows:  

The FIIs were net  sellers of  Rs -730.99 Cr in the cash segment on Wednesday while the DIIs were net buyers of  Rs 605.88 Cr, as per the provisional figures released by the NSE.

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