INDIAN EQUITY MARKET OUTLOOK - 26 FEB 2016

INDIAN BENCHMARKS are likely to witness positive opening as the global cues look supportive with SGX Nifty trading 69 points higher. Indian equity benchmarks are likely to witness a gap up opening on Friday, the first day of the March derivative series, tracking a bullish trend across Asia and a strong finish at Wall Street overnight amidst a meeting of finance chiefs from the G20 countries. Strength in the CNX Nifty Index futures for March delivery that rallied by 0.82 per cent or by 58 points at 7,070 at 10:39 am Singapore time, signals that the Sensex may open higher on Friday, when the government presents the economic survey of the various policy initiatives over the past year. The focus will be firmly on the Union Budget 2016-17 to be presented on Monday by Finance Minister Arun Jaitley which will indicate the progress on reining in the fiscal deficit and measures taken by the government to kick start the investment cycle. Indian shares fell for a third consecutive session on Thursday as caution prevailed ahead of the federal budget due next week, while sentiment was further hit by weaker global markets and the expiry of derivatives contracts at the end of the session. The S&P BSE Sensex and CNX Nifty ended 0.49%-0.69% lower each.

Headlines for the day:

• · Crompton fixes record date at 16 March 2016 for demerger
• · Lupin to invest in Japan; eyes 20 launches
• · IDBI Bank to raise Rs1500 crore by preferential issuance of shares to LIC

Global Indices:

·  Asian stocks rallied as concerns over China eased after the country’s central bank assured that it had further monetary easing room to help prop up growth in the world’s second biggest economy and that there is no reason for yuan depreciation.

·   China’s Shanghai Composite advanced and Hang Seng jumped over 1.7 per cent and Japan’s Nikkei 225 rose as a weaker yen bolstered the lure for exporter stocks. Wall Street rallied on Thursday as oil’s rebound cheered traders, helping investors brush aside renewed volatility in Chinese shares which sank nearly 6 per cent.

·   Meanwhile, orders for US capital goods rose the most since June 2014, up nearly 3.9 per cent in January 2016, a sign that the manufacturing downturn in the world’s biggest economy may be abating. The Dow Jones Industrial Average advanced 1.29 per cent; the Nasdaq Composite rallied 0.87 per cent while S&P 500 gained 1.13 per cent.

Trend in FII flows:  

The FIIs were net  sellers of  Rs -1465.68 Cr in the cash segment on Thursday while the DIIs were net buyers of  Rs 806.97 Cr, as per the provisional figures released by the NSE.

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