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25
January 2017
I had mentioned in Tuesday’s closing
report that Nifty, Sensex were on an upswing and that bulls had taken charge
again. The major indices of the Indian stock markets surged on a clear rally
and closed with gains of 1.21%-1.5% over Tuesday’s close. NSE trading volumes
were also on the higher side. The trends of the major indices in the course of
Wednesday’s trading are given in the table below: The Total Investment
& Insurance Solutions
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| Major Indices (The Total Investment & Insurance Solutions) |
Indian equities were lifted during
the mid-afternoon trade session on Wednesday as short-covering on the back of
futures and options (F&O) expiry, coupled with positive Asian markets and
hopes of incentives in the upcoming Union budget, cheered investors'
sentiments. Besides, a marginally strong rupee and healthy quarterly results in
finance and bank sectors added to the upward trajectory. Buying was witnessed
in banking, capital goods and consumer durables stocks which boosted the key
indices to trade with substantial gains of more than 0.50% each.
The BSE market breadth was tilted in
favour of the bulls -- with 1,490 advances and 1,057 declines. On the NSE,
there were 874 advances, 589 declines and 85 unchanged. The equities markets
traded at their highest levels in nearly two-and-a-half-months on the back of
budget expectations and recent good quarterly results in the finance and bank
sectors, claimed market analysts. The only sector which isn't participating in
the rally is the pharma sector, as pharma stocks were hit by the FDA (Food and
Drug Administration) and (US President Donald) Trump's Make in America policy.
Bank stocks rallied and heavy volumes were witnessed in options on the day of
F&O (Futures and Options) expiry. The US dollar took a breather and slipped
against all major currencies. The Total Investment & Insurance
Solutions
The real estate industry is in the
process of a significant reboot. Regulatory interventions are going to move the
industry from an unregulated, unorganised and fragmented sector to a more
organised, predictable, regulated sector. Industries like banking and telecom,
which saw similar interventions in the past, have witnessed enormous expansion
thereafter. For the last few years, the industry has been plagued with excess
supply, sluggish demand, high but flattish prices, and an unflattering
performance. However, we must appreciate that, much like gold, real estate is
seen to be an aspirational purchase and there remain strong underlying growth
drivers for the industry. Continued urbanisation, housing shortage,
up-gradation, job creation and nuclear families will all continue to be strong,
long-term drivers for the industry. The industry is big, contributing to 5%-6%
of the GDP (Gross Domestic Product), and therefore, is an important driver of
economic activity as well. Existing established players who are not facing
strictures from the Supreme Court and the National Consumer Disputes Redressal
Commission are likely to face bullish days on the stock markets in the course
of the year 2017-18.
While established players in the
real estate sector can do well, it is not good news for the entire sector.
Disruptions caused by demonetisation and the general caution on the part of
buyers will hit property sales in India by at least 20%-30% in 2017, Fitch
Ratings said in its latest report. "We expect home prices also to decline
this year because demand for residential property has weakened significantly in
the fourth quarter of 2016, following the demonetisation of large denomination
notes in November last year," said the ratings agency. "The worst
downturn in home sales is likely to occur in the first half of 2017. Demand is
likely to recover moderately in the second half as festive season approaches,
and because banks have cut interest rates on home loans by 50-60 basis points
over the last 12 months to multi-year lows," it said. "Demonetisation
has made it harder for home buyers to use undeclared wealth for property buys.
The number of residential units sold in the fourth quarter of 2016 fell 44 per
cent year-on-year, dragging down overall units sold in 2016 by 9%, based on
data compiled by Knight Frank Research." The volume of new units launched
fell by 61%.
The Total Investment & Insurance Solutions
The overall petroleum product
consumption growth in India from April to December remained strong at 9%
despite a slump in diesel as the demand in petcoke emerged stronger, a
Jefferies report said on Wednesday. "Overall product consumption growth in
India has remained strong in nine months of FY17 at 9% year-on-year despite
slower diesel growth due to strength in many other products like petcoke,
gasoline, liquefied petroleum gas (LPG), aviation turbine fuel (ATF) and fuel
oil," a report said. Petroleum product consumption growth has remained
strong though it is down slightly from last year's high of 10.9%. This is despite
diesel volume growth decelerating to 3.7% during April-December, from 7.5% in
the corresponding period the previous fiscal, it said. According to the report,
the two things that stood out in April-December period were that while the
petcoke consumption in India overtook gasoline in tonnage terms, kerosene use
was down sharply due to the government strategy, with positive implications for
fuel subsidy. While kerosene consumption had been declining steadily for many
years, LPG consumption growth was at a 12-year high. Shares of oil marketing
companies in the public sector and Reliance Industries are likely to see good
times in the stock markets. Reliance Industries shares closed at Rs1,017.00,
down 1.03% on the BSE.
Passenger car major Maruti Suzuki on
Wednesday reported a rise of 47.5 per cent in net profit for the third quarter
(Q3) of 2016-17. The net profit increased to Rs1,744.5 crore for the quarter
ended 31 December 2016 from Rs1,183 crore in the corresponding period of
2015-16. "Increase in share of the company's higher segment models, lower
sales promotion and marketing expense, cost reduction efforts and higher
non-operating income contributed to increase in profits," a company
statement said. "This was partially offset by the increase in commodity
prices and adverse foreign exchange movement during the quarter." The
passenger car major's total income from operations during the period under
review rose by 13.06% to Rs19,173.1 crore, from Rs16,957.6 crore reported for
the quarter ended on 31 December 2015. The company's net sales during Q3 grew
by 12.4% to Rs16,623.6 crore. Maruti Suzuki sold 387,251 vehicles during the
quarter under review, logging a growth of 3.5% over the similar period of the
previous fiscal. The company’s shares closed at Rs5,796.80, up 1% on the BSE.
The top gainers and top losers of
the major indices are given in the table below:
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| Top Gainer (The Total Investment & Insurance Solutions) |
The closing values of the major
Asian indices are given in the table below: The Total Investment
& Insurance Solutions
 |
| Asian Indices (The Total Investment & Insurance Solutions) |
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