The Indian markets bounced back in last session supported by gain in IT stocks. Today, the start is likely to be flat-to-positive with not so bullish sentiments from the Asian peers. Traders will be getting some support with Finance Minister Arun Jaitley’s statement that situation is normal as far as remonetisation is concerned and RBI is monitoring cash position on a daily basis. Minister of State for Finance Arjun Ram Meghwal too has said that demonetisation of old high value currency and the government's push towards digital economy will definitely expand India's GDP. He also said that India was on the verge of a transition from a large cash economy to a less cash and digital economy. However there will be cautiousness too with domestic rating agency India Ratings and Research (Ind-Ra) dosen't expecting the performance of Indian companies to improve substantially in FY18. Pick-up in capital expenditure by the private sector is at least another two fiscal years away. Rise in commodity prices and uptick in interest rates amid rate hikes globally are two important risks to slow-but-improving demand for FY18. There will be some scrip specific action with change announcement of NSE’s benchmark index Nifty, where BHEL and Idea will be making way for HDFC and IOC from March 31, 2017.
The US markets ended almost flat after a lackluster performance in the last session, as traders expressed some uncertainty about the near-term outlook for the markets following the recent run to record highs. The Asian markets have made mixed start after a rekindling of reflation trades that had been fueled by optimism that the U.S. economy can withstand higher interest rates.
Back home, Indian equity benchmarks traded with traction and settled near intraday high levels with a gain of over half a percent on Thursday, with key gauges surpassing their crucial 28,300 (Sensex) and 8,750 (Nifty) levels. Traders took encouragement with report that India’s exports continued to grow for the fifth straight month, expanding by 4.32 percent to $ 22.11 billion in January against $ 21.19 billion in the same month of 2016. Imports also rose, by 10.70 percent to $ 31.95 billion, during the month under review. Some support also came after Fed Chair Janet Yellen, who in her second day of economic testimony before Congress, offered no additional insight on the timing of the central bank's next rate hike. Moreover, investors closely watched GST Council meet scheduled on February 18 and assembly elections in five states that will end on March 8. The performance of Prime Minister Narendra Modi’s party in ongoing state elections will determine if the trickle of foreign money returning to Indian stocks turns into a gush. On the global front, European markets traded in red in early deals, as investors offload positions in risky assets amid expectations that the Federal Reserve could raise interest rates more aggressively than expected following upbeat U.S. economic data. Asian markets ended mixed, as traders opted to take profit off the table at higher levels. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too participated strongly in the rally. On the sectoral front, IT stocks remained on buyers’ radar after the industry body NASSCOM said that restrictions on H-1B visas in the US and the impact of Brexit are threatening to disrupt the growth trajectory of India’s information technology sector. Buying in realty stocks too aided sentiments on reports that private equity investments in the real estate sector increased by 26 percent during 2016 and touched a nine-year high of nearly Rs 40,000 crore. Finally, the BSE Sensex surged 145.71 points or 0.52% to 28,301.27, while the CNX Nifty was up by 53.30 points or 0.61% to 8,778.00.