Nifty,
Sensex headed higher – Monday closing report
I had mentioned in Friday’s closing report that Nifty, Sensex were trendless. The major indices of the Indian stock markets rallied on Monday and closed nearly 1% higher than Friday’s close. The trends of the major indices in the course of Monday’s trading are given in the table below:
Higher global markets and
a healthy rise in global crude oil prices, and the strong trend in US premarket
futures lifted the key equity indices on Monday. The markets opened low
prompted by news of Reserve Bank of India (RBI) Governor Raghurram Rajan formally
declining a second term. However, healthy buying in automobile, IT (information
technology) and capital goods stocks helped pare initial losses. There
are major upcoming global event risks such as referendum in Britain on whether
or not to stay as a part of the European Union (EU). Further, investors have
been concerned about the US Federal Reserve Chairwoman Janet Yellen's testimony
to the US Congress. Value buying after the initial downslide lifted prices.
Besides, higher Asian and European markets buoyed domestic key indices.
In addition, an
appreciation in rupee's value after it fell to a low of 67.70 restored
investors' risk taking appetite. The Indian rupee opened on a weak note as
investors reacted to the news on Rajan's exit. It touched a low of 67.70
against a US dollar, but sales by exporters and sovereign intervention pushed
it back below 67.40 levels on spot.
IT and pharma sector
stocks traded firm on continuous buying support, while banking stocks also
traded with sideways to firm sentiments.
India, on Monday,
announced major reforms in its foreign equity norms, notably in aviation,
pharmaceuticals and food processing sectors, further opening the doors for the
inflow of enhanced overseas capital. The announcement was made in a statement
issued by the Prime Minister's Office with an eye on creating more jobs,
improving infrastructure and making the investment climate in the country more
conducive for attracting foreign investment and technology. These decisions
were taken at a high-level meeting here on Monday, chaired by Prime Minister
Narendra Modi.
Healthcare providers in
India are expected to spend $1.2 billion on information technology (IT)
products and services this year -- an increase of 3.4% over 2015 -- a report
said on Monday.
“Healthcare spending is
expected to reach $339 million in 2016, growing 5.2% over 2015,” said Moutusi
Sau, principal research analyst at a global market research firm Gartner.
IT services, which includes consulting, software support, implementation,
hardware, IT outsourcing (ITO) and business process outsourcing (BPO), will
continue to be the largest overall spending category within the healthcare
providers sector. “The BPO sub-segment will record the fastest growth rate of
15.4% over 2015. ITO will be the largest sub-segment in IT services recording a
7.5% increase in 2016 to reach $107 million in 2016,” Sau added. The S & P
BSE Information Technology Index on the BSE closed at 11,549.64, up 2.00%.
The global credit rating
and research arm of the Fitch Group does not see much of an impact on India's
larger policy profile following the exit of Reserve Bank of Governor Raghurram
Rajan from September and said the successor, though, will inherit a
"solid" base. "From a rating perspective, policies are more important
than personalities. In the past years, significant policy changes have been set
in motion in India not in the least by governor Rajan," said Thomas
Rookmaaker, Director in Fitch's Asia-Pacific Sovereigns Group. "Problems
associated with both high inflation and weak bank balance sheets have been
recognised, and policy makers are doing something about it -- including through
the set-up of new policy frameworks," Rookmaaker said in a statement.
This, he said, implied support for such policies beyond the governor in RBI and
government. "The next governor seems to inherit a solid basis in this
regard, providing him or her with good opportunity to continue to pursue
relatively low consumer price inflation and strengthened bank balance
sheets." The software market will grow 6% in 2016 to reach $106 million,
up from $100 million in 2015. Infrastructure will grow 4.5% in 2016 to reach
$43 million.
The closing values of the major Asian indices are given in the table below:
No comments:
Post a Comment